Weekend Report 2023_08_06

Bottom Line:

Evidence of a top of relative significance is in place due to last week’s drop in all four US primary trading indices.

The SPX closed down Friday for the fourth consecutive day. Four consecutive down closes is rather rare, so at least a short-term low is likely early next week.

The inevitable rally off whatever initial low is formed will be very important to the intermediate term path of the US indices. This will be a focal point of analysis as it occurs. It is still possible this decline is only a part of a topping process that includes new highs, or very deep retracements, by one or more of the primary indices.

PDF: Weekend Report_2023_08_06
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Auction Market Structure

Please review last weeks detailed discussion of the current market structure/condition from the perspective of the profile graph.

This was posted last week:

Here is the update of the potential Paths of Development as we head into next week:

RUT

Weekly

Daily

Upper KRA: 2005-2030
Lower KRAs: 1949; 1922-1911

NDX

Weekly

Daily

Upper KRA: 15928
Lower KRA: 14697

SPX

Weekly

Daily

Upper KRA: 4542
Lower KRA: 4472-4440; 4405-4382

DOW

Weekly

Daily

Upper KRA: 35686
Lower KRAs: 34658-34378

Internals

Nothing extreme…yet.

SPX 30m / Breadth

Very unusual relationship as of Friday’s close. Not sure of it’s implication. Simply posting this as something to watch, because if anything, this is implying some sort of “normalization” that likely includes a very sharp short-term move.