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Weekend Market Analysis 1 July 2018

Jun 30th, 2018 No comments

Executive summary

Equity markets were down again this week as the world moves into a powerful ‘tipping point’ period. Extremes in sentiment have developed to a degree where, very soon (like next week), reversal patterns will start to reduce US$ value, increase precious metals, and re-ignite the stock market collapse. The dollar rally is complete after peaking at $95.529 as it now begins a period of weakness with, conversely, every evidence of the start of a sustained gold rally having bottomed at $1245.85 on Thursday. On the New York Stock Exchange the 10 week long countertrend rally in the Dow Jones is either complete or should end next week, after which serious declines should follow as the slowly evolving bear market continues to unfold worldwide. Measures of investor optimism remain at elevated levels as the impending threat remains virtually completely unnoticed. The US bond market is probably still in a countertrend rally with a little way to go yet before it too re-ignites into the evolving bear market which started in mid-2016.

 

US$

The US$ has a confirmed top after peaking at $95.529 and is likely now to move lower through a period of weakness. The chart pattern still needs to develop further before more accurately determining the extent of weakness, but a previous low sits at $93.80 with a broader support zone below that.

The oscillators are turning down in support of a weaker dollar.

 

 

 

The longer term 3 year weekly chart illustrates the bearish twin Star candles at the peak which indicates weakness, whilst both moving averages converge with a previous low at $92.80 to provide strong support. Once this conflict is resolved it will provide more clues as to dollar movements beyond that.

 

 

 

 

Japanese Yen

The US$/Yen has been pushed back up into resistance which for now is preventing further Yen strength. The chart structure has a bias towards Yen weakness and as long as this persists the dollar is unlikely to lose value quickly. Although this may reverse, both oscillators are rising supporting the opposite view.

 

 

 

US Treasuries

The benchmark US Treasury 10 year yield continues to move in a sideways channel closing at 2.85%. The countertrend correction is therefore still in progress which may see the yield still move lower towards the support line at 2.72% before resuming the climb towards higher yields once again. The main trend towards higher yields may be delayed if stock market declines resume in the coming week which will generate increased need for ‘safe haven’ investments which will in turn increase switching from equities to bonds.

 

 

 

Gold

Gold dropped sharply down to a new 6 month cycle low at $1248, but all evidence now indicates a strong rally in the short term. This is mostly due to the low levels of sentiment towards precious metals and the high level of investor pessimism. Also, when you add the cyclical nature of the charts and the high probability of dollar weakness in the next period, then the next gold phase is probably up.

The oscillators are now bottoming and supportive of this argument.

 

 

 

The longer term 3 year chart has the diagonal supports breached (although not seriously), but it also illustrates the high probability that this is definitely a new 6 month cycle low. The next phase is therefore up and this is strongly supported by the oscillators.

 

 

 

The yet longer term massive pentagon base pattern continues to hold and remain intact, also with strong oscillator support for the next phase up.

 

 

 

HUI / Gold Ratio

The HUI / Gold ratio illustrates how the US miners strongly outperfprmed gold on Friday. The spike up very nearly reached the critical 0.1406 level still needed for the miners to start gaining real traction. The oscillators have also turned up in support.

 

 

 

GDX US miners ETF

Although GDX is still moving sideways with a negative bias, it has of course also spiked up close to the diagonal resistance line. This chart will probably see strong upward moves in the coming week, and also has  strong supportive oscillators.

 

 

 

 

The longer term GDX chart continues to illustrate the range-bound nature of the chart structure, and what needs to happen of course is to break the diagonal resistance line if any real progress is to be achieved. The volume decline is an added indication of investor pessimism.

 

 

 

DUST US Gold Miners Bear Index

The DUST chart continues to move sideways towards the triangle apex, but with a very weak Friday which is positive. The oscillators are pointing towards further weakness.

 

 

 

Silver

Silver dropped sharply down to a new 6 month cycle low at $15.95, but all evidence now indicates a strong rally in the short term. As with gold, this is mostly due to the low levels of sentiment towards precious metals and the high level of investor pessimism. Also, when you add the cyclical nature of the charts and the high probability of dollar weakness in the next period, then the next silver phase is probably up.

 

 

 

The longer term 3 year chart reducing wedge patterns continue to hold as the price moves sideways towards the triangle apex which is now likely to break up.

MACD continues its 18 month long process of honing to a point while the Slow Stochastic moves sideways.

 

 

 

Gold : Silver Ratio

The ratio has broken clearly through the bottom of the 2 year pattern (red) and maintains a positive downward sloping bias which augurs well for the next period. The oscillators are also dropping which is positive for a yet lower ratio soon, which is positive for metal prices.

 

 

 

 

General Equities

Extremes in sentiment have developed to a degree where, very soon, patterns will start to re-ignite the stock market collapse. On the New York Stock Exchange the 10 week long countertrend rally in the Dow Jones is either complete or should end next week, after which serious declines should follow as the slowly evolving bear market continues to unfold worldwide. Measures of investor optimism remain at elevated levels as the impending threat remains virtually completely unnoticed.

The Dow has a clear breakout through the bottom of the bearish rising wedge pattern, which is likely to now propel prices lower. The recent drop includes 11 consecutive closes below 10-Dema. The next break points are indicated at ‘A’ and ‘B’ which are the next levels to be tested at 23550 and then 23344.

 

 

 

 

 

Categories: Currency, Equity, Gold Tags:

Weekend Market Analysis 17 June 2018

Jun 17th, 2018 No comments

Executive summary

World equity markets were mixed this week with the US Dow leading down slightly and the EU up, with the prime causes being the US Fed hiking the rate and the ECB holding the rate steady. The US Fed was particularly hawkish in what the market read as potentially 4 rate hikes in 2018 as opposed to the 3 earlier. The dollar index increased strongly against virtually all other currencies to close at $94.45, and this had gold move down sharply to close at $1278.50 despite initially strengthening with the dollar up to $1314 on Thursday. The US market also had to contend with increased tariff hike talk from Trump with China indicating retaliation which once again highlights the prospect of trade wars. This may again signal the top of the countertrend rally in the US Dow Jones although in turning down it ended the week with a ‘Hammer’ candle with a long bottom shadow which usually indicates increased prices to follow. The more positive phase in gold has been nullified for the time being. Treasuries continued sideways this week with the US 10 year yield closing at 2.93% as it did last Friday, although most of the week registered higher yields. The EU and Japan treasuries remain at low yields with monetary easing remaining in place for the time being against the monetary tightening in the US.

Investor interest on the New York Stock Exchange remains highly complacent with high optimism as measured by various indicators such as volatility, ‘Advance/Decline’ and ‘Put/Call’ ratios, etc., which is all consistent with the late stages of maturity in a bull market. Conversely, the precious metals market exhibits a high level of investor pessimism with the gold price closing below the erstwhile supposed 6 month cycle low of $1281. There are a number of reasons why gold should enjoy a significant rally such as the steadily increasing US interest rate, increasing inflation, plus many others. But, it seems the whole precious metals complex is much more likely to endure further significant downside before this materialises.

 

US$

The US$ has resumed its rally, sparked by the US rate hike this week, and is likely to move higher than the earlier peak at $95.15 before unfolding into the next structural pattern. The chart produced a large engulfing candle on Thursday as a ‘Tower of Strength’ engulfing 8 previous candles, which is likely to propel the dollar through and beyond the resistance zone soon.

The oscillators are rising in support of this proposition.

 

 

 

The longer term 14 year chart illustrates the dollar increase up to resistance at the 95 level and the probable rise higher. The chart, as well as a number of other long term charts, illustrate the likelihood that the next long term moves will be down, after further higher levels first.

 

 

 

Japanese Yen

The US$/Yen is holding at diagonal resistance (blue) which is relative strength given the recent strong dollar moves up. This is supportive of a stronger gold price but the Yen may yet weaken with impending dollar strength.

The oscillators are mixed however and moves may be either way.

 

 

 

US Treasuries

The benchmark US Treasury 10 year yield moved sideways this week at 2.93% and is in a countertrend correction which may see the yield move still lower towards the support line at 2.72%. The main trend is towards higher yields though which will resume in due course as the bond market continues to collapse as it has been doing since mid-2016.

The oscillators are mixed and not particularly supportive either way.

 

 

 

US Treasuries and Gold

The relationship between gold and the US Treasury 10 year price is reflected in the chart below with rising bias in strong gold / weak bond price, and reducing bias in weak gold / strong bond price. The chart is bullish but continues to stall in the tail until a stronger gold price and weaker bond market completes the right shoulder in the H&S pattern.

The oscillators are dropping and this indicates further deterioration in the chart which is not supportive of gold or higher bond yields yet.

 

 

 

Gold

Gold has been in a reluctant rally from the erstwhile supposed 6 month cycle low at $1281 as well as not confirming recent silver strength. This has produced a ‘divided’ precious metals complex which suffered the inevitable fate of a plunging gold price on Friday. It dropped 2.25% on Friday to a new potential 6 month cycle low at$1278.50.

The more positive phase in gold has been nullified for the time being as the precious metals market exhibits a high level of investor pessimism. There are a number of reasons why gold should enjoy a significant rally such as the steadily increasing US interest rate, increasing inflation, plus many others. But, it seems the whole precious metals complex is much more likely to endure further significant downside before this materialises.

The oscillators look precarious and gold is likely to fall further next week.

 

 

 

The longer term 3 year chart remains strong and illustrates the diagonal supports and previous lows are holding, in a chart structure of higher highs and higher lows. However, the erstwhile 6 month cycle low has been breached and a new one is to be found lower down.

The oscillators are mixed and not supportive either way.

 

 

 

The yet longer term massive pentagon base pattern continues to hold as it prepares for penetration of the neckline at $1375.00 at the top or the diagonal support line at the bottom. The next week or two should be telling.

 

 

HUI / Gold Ratio

The HUI / Gold ratio is indicative of the highly geared nature of the gold miners, as it had a positive week in rising to the key level of 0.1406 only to drop back to 0.139 on Friday. It still needs to penetrate the 0.1406 level to regain a positive bias and achieve real traction for the miners, but this now seems unlikely for a while.

The oscillators are mixed and not supportive either way.

 

 

 

GDX US miners ETF

GDX also had a positive week rising to the previous high and penetrating diagonal resistance before falling back on Friday in a chart that continues to moves sideways. Support at previous lows at $22 continues to hold.

Although the MACD is holding the Slow Stochastic is turning down which is negative.

 

 

The longer term GDX chart continues to illustrate the range-bound nature of the chart structure, and the oscillators are not particularly positive to suggest any change soon.

 

 

 

DUST US Gold Miners Bear Index

The DUST chart is moving sideways with a slight positive bias towards the triangle apex, which could break up or down. Up will be bearish for US gold miners, and the Slow Stochastic is pointing that way.

 

 

Silver

Silver had a very positive 8 trading days to penetrate diagonal support (blue) and very nearly reach the previous high at $17.39. During this time it was not confirmed by gold which cast a negative feel to the whole process, and this culminated in a disastrous Friday drop of 4.5%. The diagonal support line was not penetrated and the 6 month cycle low is still well clear and holding.

The oscillators are dropping suggesting further price drops next week.

 

 

 

The longer term 3 year chart reducing wedge patterns continue to hold as the price moves sideways towards the triangle apex which could break either way. Price is still midway between support and resistance although there has been a fleeting false break up. The week ended with a bearish ‘Dark Cloud Cover’ candle, with a long shadow above which normally means lower prices to follow.

MACD continues its 18 month long process of honing to a point while the Slow Stochastic moves sideways.

 

 

 

USLV US Silver Miners Bull Index

The US silver miners USLV (bull index) also had a positive week in breaking up to create a new higher level resistance zone (blue). It broke down strongly on Friday but closed well above support (red). The whole process of up and down has closed all the gaps.

The oscillators are still exhibiting positive divergence with price, which continues to bode well.

 

 

Gold : Silver Ratio

The ratio has had a strong week dropping down below 76, only to be corrected up by Friday’s prices to close at 77.58. The oscillators are dropping which is positive for a yet lower ratio soon, which is positive for metal prices. A strong downward sloping trendline (black) has formed.

 

 

 

General Equities

The Dow Jones dropped slightly this week due to the US Fed hiking the rate together with increased tariff hike talk from Trump with China indicating retaliation which once again highlights the prospect of trade wars. The US Fed was particularly hawkish in what the market read as potentially 4 rate hikes in 2018 as opposed to the 3 earlier. The Dow Jones only dropped 0.89% in the week and it closed on a ‘Hammer’ candle with a long bottom shadow which usually indicates increased prices to follow.

Investor interest on the New York Stock Exchange remains highly complacent with high optimism as measured by various indicators such as volatility, ‘Advance/Decline’ and ‘Put/Call’ ratios, etc., which is all consistent with the late stages of maturity in a bull market. This may again signal the top of the countertrend rally in the US Dow Jones

The Dow is in a threatening ‘rising wedge’ pattern which it could break down through soon as the oscillators are both dropping.

 

 

 

 

 

Categories: Currency, Equity, Gold Tags:

Weekend Market Analysis 10 June 2018

Jun 9th, 2018 No comments

Executive summary

World equity markets mostly moved sideways to up as the countertrend rally in the US Dow Jones continued into its 10th week, with increased evidence that the rally has probably run its course. Investor interest is  languishing as ratios such as ‘Advance/Decline’ and ‘Put/Call’ continue to fall. Gold continues into a more positive phase again, buoyed by stronger silver which continues to outperform as it continues to improve the Gold/Silver ratio which closed below 78. Treasuries continued sideways this week with the US 10 year yield closing at 2.93%, which has further to drop in the countertrend correction before finally again resuming the bond market collapse to yields above 3% and then 5% and beyond. This will of course be in tandem with general equities worldwide which are still in the early stages of the developing bear market.

The US$ continued to weaken to close at $93.54 with further weakness to come in the long term, however it is still likely to rise above its rally peak before this happens. This has gold as well as the whole resource sector looking stronger at the moment with a variety of positive options in the short term. However, there are also some contrary indications and this is all happening with the continued array of disquieting events globally which include, amongst others:

  • G7 meeting this weekend with the world largely against Trump (Climate, Iran, and much else);
  • Trump meeting Kim Jong Un next week on 12 June;
  • Another potential US rate hike next week with the US Fed meeting on the same day (12 Jun);
  • Potential trade wars;
  • Continued peril in the EU from Italy to potentially another 5 or 6 countries wanting to exit;

So, the fine balance between stability in the US$, gold, bond and equity markets continues.

 

US$

The US$ has turned down from its recent peak after confirming the top with more than 2 consecutive closes below 10-Dema. After further expected weakness it is likely to increase above the recent peak at $95 before weakening long term.

The oscillators are dropping in support of further weakness.

 

 

 

The longer term 14 year chart illustrates the dollar increase up to resistance at the 95 level and the drop back since. The chart, as well as a number of other long term charts, illustrate the likelihood that the next moves in the longer term will be down, after the current adjustments around the $95 level.

Pic US$14y

 

 

Japanese Yen

The US$/Yen price at 109.43 is midway between support and resistance in a chart pattern illustrating a bias towards a stronger Yen. This also supports a stronger gold price and a weaker dollar as the Yen trends towards the region of support (red).

The oscillators are turning down in support of further Yen strength in the short term.

 

 

 

US Treasuries

The benchmark US Treasury 10 year yield is patently underway in rising towards the next increase tranche (probably to the 5.0% region), but is in progress with a countertrend correction at the moment. This is likely to persist for the time being with yield moving back down towards the 2.72% support line (red) before rising with the trend aggressively.

The oscillators are dropping in support of further reduction in yield in the short term.

 

 

 

US Treasuries and Gold

The relationship between gold and the US Treasury 10 year price is reflected in the chart below with rising bias in strong gold / weak bond price, and reducing bias in weak gold / strong bond price. The chart is bullish but continues to stall in the tail until a stronger gold price and weaker bond market completes the right shoulder in the H&S pattern.

 

 

 

Gold

The gold price is in a reluctant rally from the 6 month cycle low at $1281 and still needs to penetrate 200-Dema and break through the higher 50-Dema if it is to test the previous high at $1326.30. Silver continues to outperform gold which is bullish, and with the expected weakness in the dollar and a probable termination in the Dow Jones countertrend rally, it seems likely that a gold breakout is imminent.

The oscillators are in support of further increase in the gold price, but there are however other negative factors suggesting otherwise, described later in this narrative.

 

 

 

The longer term 3 year chart remains strong and illustrates the diagonal supports and previous lows are holding, in a chart structure of higher highs and higher lows. The 6 month cycle low should now lead to more aggressive price increases.

The oscillators are mixed and probably more time is required for this to all unfold positively.

 

 

 

The yet longer term massive pentagon base pattern continues to hold as it prepares for penetration of the neckline at $1375.00 which, once achieved, will propel gold up by the depth of the head to higher prices.

 

 

 

HUI / Gold Ratio

The HUI / Gold ratio bias has turned from positive to negative and it still needs to penetrate 0.1406 to generate real traction in the miners.

The oscillators are mixed indicating that more time is required to develop a positive structure.

 

 

 

GDX US miners ETF

The GDX chart structure is also turning slightly negative although the previous lows at $22 are holding. Penetrating 200-Dema is also necessary and this last happened 18 trading days ago. The diagonal resistance line (black) is proving difficult to breach as well as to start clearing some previous highs.

Although the MACD is holding the Slow Stochastic appears to be turning down which is negative.

 

 

 

The longer term GDX chart continues to illustrate the range-bound nature of the chart structure, and the oscillators are not particularly positive to suggest any change soon.

 

 

 

DUST US Gold Miners Bear Index

The negative bias in the DUST chart (bullish for US gold miners) is moving sideways and could be turning up slightly judging by the oscillators (bearish for US gold miners).

 

 

 

Silver

The silver price has broken up through 200-Dema in a positive thrust since the 6 month cycle low, as it continues to outperform gold. The oscillators are mildly supportive.

 

 

 

The longer term 3 year chart continues to simmer positively with good oscillator support. But silver is still stalling at 50-Wema and needs to breakout above $17 to breach the top line of the reducing wedge.

MACD continues its 18 month long process of honing to a point which all has an upward bias suggesting a strong breakout when it happens.

 

 

 

USLV US Silver Miners Bull Index

The US silver miners USLV (bull index) has broken up into resistance after the recent positive oscillator divergence. The chart looks positive and as such supports better silver prices and a lower gold / silver ratio.

 

 

 

Gold : Silver Ratio

The ratio has broken down through the bottom line of the rising pattern of the past year in closing at 77.81. This is very positive for higher precious metal prices. Although the oscillators are mixed the chart looks promising.

 

 

 

General Equities

The Dow Jones countertrend rally has probably run its course in closing yet higher after 10 weeks. Investor interest is languishing as ratios such as ‘Advance/Decline’ and ‘Put/Call’ continue to fall and the next moves are probably down to start testing the previous low at 24247. Dow declines below this level will signal significant moves lower, towards the next zone of support between at 23600-23300. This is all indicative of the early stages of the developing bear market that chart structures worldwide are illustrating.

The Slow Stochastic is topping out in support of lower prices from here.

 

 

 

A fascinating aspect of this particular market decline is that virtually nobody is concerned and virtually everybody believes this is all part of a continuing bull market. Volatility, as measured by the VIX, is at the same level now, at a much lower price, as it was on 26 Jan 2018 when the market peaked. The market is virtually unaware of the impending collapse ahead.

 

 

 

 

 

 

 

 

 

Categories: Currency, Equity, Gold Tags:

Weekend Market Analysis 3 June 2018

Jun 2nd, 2018 No comments

Executive summary

World equity markets mostly moved down this week with a stronger Friday as they continue to evolve in a broad cluster at or below the main historic bull market resistance trendline. The general equity chart structures worldwide are still in the early stages of the developing bear market. Treasuries are moving up in a countertrend correction with the US 10 year yield dropping sharply from the high at 3.11% to 2.77% but, with the chaos in Italy abating and the positive US jobs report on Friday, moved back up to 2.89%. Donald Trump chose the moment just before the release of the jobs numbers to slap steel and aluminium tariffs on the US closest allies, knowing the equity markets would rally anyway on Friday.

The US$ rally topped out and closed lower at $94.17 with further weakness to come, although this could be followed later by a yet stronger dollar. This has gold looking stronger after the 6 month cycle low at $1281 despite closing lower than recent prices at $1299.30, with further strength in the whole complex likely in the next period. There is a fine balance now between a breakout with higher prices to follow on the one hand and a continued sideways movement for the whole complex on the other.

 

US$

The US$ has turned down from its recent peak although with still no confirmed top. It still needs at least 2 consecutive closes below 10-Dema and is sitting at the moment on 30 consecutive closes above 10-Dema. It is nevertheless likely to move lower although is equally likely to thereafter move higher again.

The oscillators are dropping in support of a lower dollar in the next period.

 

 

 

The longer term 14 year chart illustrates the dollar increase up to resistance at the 95 level and the likelihood of moving lower next. The chart, as well as a number of other long term charts, illustrate the next moves to be down for the time being.

 

 

 

US Treasuries

The benchmark US Treasury 10 year yield is patently underway in rising towards the next increase tranche (probably to the 5.0% region), but is in progress with a countertrend correction at the moment. This reversed slightly on Friday but has probably not completed yet, and is likely to at least penetrate the red horizontal at 2.72%.

The oscillators are dropping in support of further reduction in yield, but the long term trend to a collapsed bond market is in process.

 

 

 

US Treasuries and Gold

The relationship between gold and the US Treasury 10 year price is reflected in the chart below with rising bias in strong gold / weak bond price, and reducing bias in weak gold / strong bond price. The chart is bullish but stalling in the tail with current weak gold and strengthening bond value (lower yield). This will create a larger right shoulder in the H&S

The chart will strengthen as gold increases in price and as the 10 year bond value decreases once yields start to increase again.

 

 

 

Gold

The gold price has increased from the low at $1281 which soon will probably confirm the 6 month cycle low. Prices need to break up through the area at about $1310 after which a run up through 200-Dema towards the long term resistance neckline at $1365 is likely. This will propel gold up towards $1400 and perhaps even beyond, but of course much depends on the US$.

The whole precious metals complex is therefore looking positive despite a lower close on Friday at $1299.30, and the oscillators are in support. Final confirmation of the 6 month cycle low and a thrust up will re-energize the complex and assist miners and silver to break their range-bound patterns.

 

 

 

The longer term 3 year chart remains strong and illustrates the diagonal supports and previous lows are holding, in a chart structure of higher highs and higher lows. Once, and if, the 6 month cycle low is confirmed this will lead to more aggressive price increases.

The oscillators are mixed and probably more time is required for this to all unfold positively.

 

 

 

The yet longer term massive pentagon base pattern continues to hold as it prepares for penetration of the neckline at $1375.00 which, once achieved, will propel gold up by the depth of the head to higher prices.

 

 

 

HUI / Gold Ratio

The HUI / Gold ratio is still positive but the bias is stalling, and needs to exceed 0.1406 to generate real traction in the miners. A strong H&S pattern is developing (No. 2 in the chart) and once this is activated it will generate impetus to the US gold miners, but the oscillators are stalling which will obviously require more time to develop.

 

 

 

GDX US miners ETF

GDX is moving sideways although it is holding the lows at $22. It needs to start clearing the diagonal resistance line (black) and some previous highs.

The oscillators are rising in support, and this can start happening now.

 

 

The longer term GDX chart continues to illustrate the range-bound nature of the chart structure, and the oscillators are slightly mixed at the moment which suggests more time is required.

The oscillators are positive.

 

 

 

DUST US Gold Miners Bear Index

DUST is maintaining a negative bias as it moves sideways which has a positive influence on the miners. The oscillators are moving sideways to down which supports further drops in DUST and increases in US miners.

 

 

 

Silver

The silver price is still trapped in sideways mode but appears to have bottomed in a 6 month cycle low earlier than gold which is positive. Closing below the red rectangle at about $16.30 will void the positve bias, but this seems less likely.

The oscillators are mildly supportive.

 

 

 

In the longer term 3 year chart the bullish reducing wedges remain intact, and if price can penetrate the target breakout box (blue) it is liable to generate strong price gains. Price is still stalling at 50-Wema.

The oscillators are mixed at the moment, while the MACD continues its 18 month long process of honing to a point which all has an upward bias suggesting a strong breakout when it happens.

 

 

 

USLV US Silver Miners Bull Index

The US silver miners USLV (bull index) is positive for silver, in that whilst it maintains a slight negative bias it is doing so with positive divergence from the oscillators. This indicates the previous highs are likely to be penetrated before the previous lows, with higher silver prices. This is strong for silver and strong for the gold / silver ratio.

 

 

 

Gold : Silver Ratio

The ratio continues below 80 and below the earlier confirmed double top. It closed a little bit up at 79.03 but actually fleetingly broke the bottom line in the upward sloping reducing wedge pattern. This is all positive although the oscillators are slightly mixed.

The target is to drop down to the 77 level.

 

 

 

General Equities

The Dow Jones cluster below the primary bull market resistance line continues to move lower slowly. The countertrend rally peaked at 25086 in late May and it closed the week at 24635. If the Dow declines below 24247 it will signal significant moves lower, towards the next zone of support between at 23600-23300. This is all indicative of the early stages of the developing bear market that chart structures worldwide are illustrating.

 

 

 

Volatility, as measured by the VIX, jolted above the moving averages last week although the relative calm on Friday returned the indicator down again. The market is largely unaware of the impending collapse ahead although a small investment element is concerned and even jumpy when downward moves occur. The VIX maintains its position between previous highs and lows but will register sharp moves as and when the equity indices move sharply.

 

 

 

 

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