Bottom Line:

I suggested in the Thursday Member update that the current rate of change was unsustainable and to begin to look for a more two-sided market. Friday’s gap up and subsequent reversal appears to have begun that process.

Identifying tops is more difficult than identifying bottoms. It is too early to have much of an idea of the immediate path of market structure. Closes by all four of the indices below the most immediate downside KRAs highlighted on the daily charts below is an initial signal a top of relative importance could be in place.

PDF: Weekend Report_2023_07_17

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RUT

Daily

Upper KRA: 2005-2030
Lower KRA: 1895

NDX

Daily

Upper KRA: 16443-16758
Lower KRAs: 15313; 15068-14903

SPX

Daily

Upper KRA: 4590-4640
Lower KRAs: 4458; 4406-4383

DOW

Daily

Upper KRA: 34572-34715
Lower KRAs: 34262; 33739-33610

Potential Paths of Development – SPX

Internals

The SPX is up almost 19% since the 3/13 low. The momentum peak of the current rally occurred on 3/31.

Unless breadth can expand this is a signal to at a minimum to be cautious pressing the long side of the indices.

SPX / Breadth 30m

The price / breadth pattern remains bullish. Immediate weakness into 4465-4442 signals a potential flip to a bearish pattern.

US 10-yr Notes

US Dollar

Favor shorts but short-term is getting extreme.

Gold

Gold stopped its decline near 1899, sort of in the middle of nowhere. That is now the important downside level.

Crude