Friday, July 8, 2016

MTU Weekend. Ed. - Behavioral Markets and Low Expected Returns(7/8/16)

Stocks are attempting an upward breakout, with large-caps leading and yet to clear key overhead resistance.  

The most bullish count is a small-degree third-wave advance (Chart 4-green). The most bearish count is that a very deep retrace of a leading diagonal triangle decline ended at Friday's high, requiring an immediate reversal (Chart 4-red). A more moderate bearish view counts the current upswing as a wave B which can accommodate a moderate ATH in SPX (Chart 4-blue). Chart 5 shows how these counts fit into the big picture.

Risk premium is vanishing fast

Bonds show little interest.