There are a lot of ifs. Usually there are, ain't there?
I think that we are at a juncture point. Carl Bretz, the originator of Trin 5, wrote a book titled "Juncture Recognition."
The question is how does it play out, and that is an open issue.
One reason to think that it is/may be a juncture point is that this daily Coppock curve, on a 280 day basis, not THE monthly equation on a 14 month basis, is, after the first thrust that kicks off the initial rally from 2009, and then the second thrust which inevitably follows, roughly equivalent now to where it was at the 2007 top.
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However, the SPX version broke above that threshold in May, 2013.
So, does the SPX breakout imply that the Dow/NYA follows above, or does the Dow/NYA reluctance to breakout above that 2007 area drag the SPX and NASD down with it?
The difference now is that back then, in 2007, the yield curve had flashed a negative warning in the last quarter of 2006, warning of an impending recession, lead time being approximately 9 months, AND we were generally heading down for the 18 year cycle bottom in Real Estate which was due in 2010. Now the situation is obverse. In the larger sense.
What happens in the meantime while that is played out is always subject to corrections, whatever the longer term outcome may be.
As of now, my stuff says nothing particularly brilliant. No tick money flow sell signal setup. No sell signal. One thing that I look for is a variant of WSJ Dow mf to stay below the 50 day ma on rallies, for a couple of months, indicating distribution. That's not there, it moved above the 50 day last week. Not that it is saying that we blast up either.
I'm going to follow the daily Coppock 14 equation, which is up, try to avoid the pothole where the SPX ROC hits 6 and the market seems to hang up regardless of Cop being overbought, follow it down, and see what happens until I get a concrete signal.
Q3 is still a major problem for a bear, it still is an injection of money into the system, even with tapering. |
