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
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
