Hi T,
Generally speaking the full moon coupled with WWW being next to each other I view as down days. The full moon brings out the crazies and emotions and WWW is when market makers have to settle their books for the next Fridays option assignments. To manage their inventory of shares that must be assigned from both puts and calls. A study of open interest for the current month very often shows where the magnets are. These magnets are often violated on the short term such that when they settle out on Friday they result in the market maker advancing the price marginally and making a paycheck from buying the dip, building inventory of discounted shares and assigning then thru in the money calls and/or puts.
Today being Friday, and futures looking strong (due to tame inflation), we could be going out today on a strong upward move.
Next week I'd expect some cobbled up story and a down day into Wednesday with a head fake on Monday showing strength.
Bottom line we've had a very explosive run up late in August and we've very quietly dropped down from a toppy level, without real damage hitting th market. From positive levels in late August, the 30 day CLX has dipped into negative territory, and yet the 2 C-P is at a solid mid 60's. During that same period AYDIS has gone from very high to modestly negative in the last week.
.
The market has left toppy to mild without a big dip in Aydis or CLX. Look at all of the record new highs of late - we're in a bull market.
The long runup we see on Breeze's Dow CLX charts has not broken up over the long-term trend line, which has been a hallmark of past tops.
We're are in lofty numbers, but the economic story is good and the many benefits of THE Big Beautiful Bill have yet to hit. Tariffs are proving to be "inflation fear" misinformation from the media and supporters of the Dems. The Treasury is banking huge tax free money. Trump is using tariffs to free market flows from abusers and stop wars. The US is in a position to encourage peace via economic persuasion. a far better way than WAR.
Trump is correct in saying the US is now respected - as the Dems and media boohoo his following the laws Congress passed and the Dems violated trying to buy votes with the lower income earners. Once Trump's BBB changes PUTS MORE MONEY IN THE LOWER INCOME EARNERS - work will become the way to gain a better lifestyle and those minimalists who prefer not working will get to work.
We are on the cusp of a breakout where the Mag 7 will go sideways and the market gains in breadth. That event will be key to look for. IMO The Russell is beginning to show that - it's a weak index with zombie stocks, but also some industrial winners that explode in profits when a cyclical upturn in the economy develops.
I believe it will develop - it's beginning to show now in the early stages.
If there is a spike in VIX and a drop in CLX to where the bottomspotter is activated, it will be a gift to BUY BUY BUY.
I have sold my highest cost shares that I bought in the last bottomspotter in April. I also have banked my dividends and now have a good war chest of cash.
If we have a huge dip and bottomspotter that results in a corrective wave, I'll count waves and try to catch the low of the A wave and the C wave.
It will be a shorter corrective as so much of the BBB changes will be taking effect in only 90+ days.
The dip could be quick and deep, but my gut says short.
Buying on the bottomspotter "active" times is the quickest way to grow one's account IMO.
If 2 C-P stays in the 60's, we'll see an extension vs. a corrective wave. No big scary dip in which to buy the discounted shares. That being said there are a lot of bulls out there, maybe they should have a bit to worry about.
That's my view and open to other thoughts backed by CLX. So far it has come from very toppy to very calm as the market has climbed the wall of worry.
It has been so long since bottomspotter has been active, I'm getting anxious to see one begin.
Bob |
