Bottom line for this week:
From last weekend’s Report:
Strong bull/bear trends are characterized by all four indices in the same relative position. Presently, while very short term this is the case among the indices, intermediate term there is stark disparity confusing to either a strong bull or bear case…
And
…Now is not the time to get stubborn or stuck on a narrative.
The price action among the indices remains disparate and confusing. The critical downside level for the indices is the same; last week’s lows. The critical upside level varies.
Knowing and admitting what you don’t know is quite powerful. Right now, I have no clue whether the next 5% move will be up or down.
I will be watching the RUT/RTY especially closely.
Daily KRAs:
I discuss each of the charts below individually in the video. Levels highlighted are CRITICAL.
Internals
The extremes alluded to in last weekend’s Report resulted in a wide range decline in the indices on Wednesday that had minor follow through on Thursday then a relentless rally on Friday.
The 10-day and 5-day EMAs of NYSE advancing issues remain elevated.
Breadth was positive on Friday but not to the extreme degree you typically see on kick-off upside moves.
So, like price, the technicals are confusing right now.
From last weekend’s Report:
Under a bullish scenario intraday contractions in breadth should not exceed -1200 or so, and price “damage” should be relatively mild.
A -2000 CLOSING breadth reading would be an initial signal a top of significance is in place.
During the decline on Thursday, following Wednesday’s wide range down day, breadth registered an intraday reading of -1466. That is pressing the “extreme” of negative breadth under a larger degree bullish assumption.
Friday was an opportunity for the market to follow through sharply lower and finally register a -2000 breadth reading.
The exact opposite happened and the indices traded relentlessly higher on Friday.
To reiterate, like price, the technicals are confusing right now.
There is nothing bell-ringing from VIX.
Gold
There is no “resistance” in Gold until near all-time highs.
Gold has been persistently grinding higher. In general I would favor longs, but a short-term, sharp move to the downside would not surprise me.
Crude
Crude is approaching an important upper KRA.
US Dollar
The US Dollar has likely put in a long term top.
US 10-yr. Notes
114’05-113’26 is the critical downside level in Notes. There is no “resistance” above last week’s high from an Auction Market perspective until near 121’00.
