Martin says
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Last week was a Directional Change and indeed it also produced an outside reversal to the upside. It still appears choppy going into the end of the month. Volatility should rise beginning this coming week and Monday the 9th is a strong target. The big volatility still appears to be the last week of August as we go into Labor Day. As I have pointed out, if we cling to the traditional decline during September and October, then this should prove to be a low and we can rally thereafter. If the market breaks out into a high in October, then we should expect a potential decline into the 1st quarter.
What we must understand is the ONLY way to approach this market is from the international perspective. Iran is disrupting tankers in the Gulf and geopolitical conflicts have their favorite month to start even wars centers around August. World War I technically began July 28th, 1914 whereas World War II technically began September 1st, 1939. The Gulf of Tonkin incident was also in early August 1964. Even Napoleon invaded Russia on June 24th, 1812. The other period for conflict tends to be March.
Then there is the economic crisis brewing in Europe. They are simply trying to deliberately crush their economy BECAUSE they can never return to normal. The negative interest rates have destroyed the EU's ability to borrow so they can only now print unrestrained to maintain political power. This provides and underlying support for the dollar for as stated on the general blog, the president of the US cannot shut down the entire economy.
We still see August as a Panic Cycle which warns that it can exceed the previous monthly high and penetrate its low, or move sharply in one direction. Note we also have Directional Changes here in August and then against in October. If we get a high and then a drop into October, that might scare everyone but we should but that low.
Turni8ng to the Quarterly Level, we also see Empirical targets here in the 3rd and 4th quarters with volatility in 2022. Look at the next election. That will be a major target with exceptionally high volatility. With Panic Cycles in our Political Models for 2022 and 2024, we see that the Quarterly Array is showing similar targets. Clearly, governments have abused this COVID Scam for political reasons that have NOTHING to do with health. The danger we have is that our models on the disease were targeting 2022 anyhow before all this nonsense began. This may simply be a variant that emerges for that is what viruses do - they evolve to defeat vaccines.
When we look at the Dow for technical resistance overhead, the Friday close of 35,208.51 leaves us looking at resistance forming at 35154.22 and 35,810.84 with the key target being 36,196.16 which would have to be exceeded to imply a real strong breakout to the upside.
When we look at the Quarterly level, the real important resistance stands at 36,332.80 and support begins at 33,870.80. It is unlikely that the Dow would exceed this level at this time where our original target for a possible high was 37,000-40,000. So we are getting close. Our minimum target for a possible high in 2021 was 35,237. By 2022 that would move up to 37,635 and in 2023 that would be 40,040 and finally reaching 42,430 in 2024. Looking out into 2032, that is where this minimum target would be 61,000.
34,714.33Now we need to hold last week's low of 34,714.33 to suggest the rally will continue. A break of that level and a close below it would be a TECHNICAL warning that a decline into October is entirely within reason.
When we turn to our Birfurcation Models, we can see we end up with a Strange Attractor starting the very week of 8/30. This is a warning that indeed something is brewing. The stochastic model is crawling in the overbought position while both our Energy Model and Internal Volatility Models are pointing to a rise in volatility just around the bend.
36,196.16 - 36,332.80Be mindful here. Only exceeding this target area both intraday and on a Weeklyclosing basis would hint that we are dealing with a Panic to the Upside set in motion by an economic apocalypse in Europe or geopolitical crisis that also can send capital fleeing to the USA as was the case in World War I and II. |
