Above is chart of Dow Futures September. This is a weekly chart. This is a trend line. We tested it last Thursday night by 40 ticks, then rallied like a little bottle rocket. I never understand “traders’ who totally discount technical indicators. We’ll re-visit this trend line again, most likely in September or the Ides of October, in my opinion.
For now , the break down looks like this from my notes:
High: 17085
Low:16208
Difference: 877 pts. (please note that the 877 points was only a 5.1% correction from the high tick)
1/2 way back we should get a 438 point relief bounce. That pencils in at 16,651.
16542 was the 38% pull back, hit today; Today’s high tick so far was 16,581 That came within 70 points of the 50% pull back.
Until we take out the contract high, this appears to be a market to sell rallies. In 3 weeks all of the adults will be back in the game and we’ll see what happens in September/October. For now, August is shaping up to be thin and volatile. I’d look for more technical trades, since earnings is over, and this market has been amazingly resilient in the face of several geopolitical messes. BTW, if you need me to re-count all of them for you, just turn on cable news. You’ll be bombarded with the negatives in short order.
CER