MTU Weekend Ed. - Short Term Update (7/18/14)

Interestingly, although the Dow, the Dow Transports, and the Nasdaq 100 Index made new highs this past week, the early July highs held in other benchmark indexes, including the Nasdaq Composite Index. See Topped? (7/11/14).

This near term divergence among benchmark stock indexes suggest the following tracking scenarios. See Chart 1.

[red] Thursday's low (1955.59 in SP500) is the low of an initial leading diagonal triangle from an orthodox high. Friday's deep retrace/rebound is consistent with the nature of an LDT.  An immediate rolling over is in order.

[blue] An ABC pullback from the early July high either completed at Thursday's low or is still in progress. Thursday's low is either all of wave C-down or wave [i]-down of wave C-down.

Market Timing Update (7/18/14)

[740am] ES update-

Market Timing Update (7/17/14)

[EOD] Stocks-
[Chart 1] Lower lows in Midcap and Russell2000 on the daily chart, but not yet in SPX and other indexes.
[Chart 2 and Chart 3] Today's sell-off is potentially a diagonal triangle. Need to confirm if it is a leading decline (LDT, chart 3 red, blue [i]) or an ending capitulation (EDT, chart 3 green, blue C).
[chart 4] The bigger picture.

[1240pm] SPX update-
Near term tracking. See chart.

[840am] ES update-

Market Timing Update (7/16/14)

[EOD] Stocks-

[950] SPX/ES update-
Near term tracking counts (by color). A potential expanding EDT and flat look interesting. See charts.

Market Timing Update (7/15/14)

[1055am] SPX update-
gap fill

[830am] ES update-

Market Timing Update (7/14/14)

[EOD] Stocks-
With the Dow, Transports, and Nasdaq hitting new highs today, SP500 is likely to follow. In rare cases, this divergence could present a 2nd selling opportunity. Let's see what Tues and Weds (Yellen testimony) bring.

[11am] new highs in Dow and NDX-
[740am] ES update-

MTU Weekend Ed. - Topped? (7/11/14)

July's price actions to date allow for further weakness in stocks. As such, it is prudent to keep an eye on the possibility that stocks have "topped", for now.

It's possible to count a five-wave decline in stocks from their high on July 3rd to their low on July 10th.  If so, a potential trend change is at hand. The red counts in Chart 1 (SPX), Chart 2 (NDX) and Chart 3 (RUT) illustrate. The price structure of the DJ Transportation Average is an exception (Chart 4)

Stocks rolling over now (if that is the case) likely means the end of the upswing from their 2011 low, the second major upswing from the 2009 bottom. Whether we have a wave C or wave 3 top remains to be seen.

We highlighted three topping scenarios in Monthly Outlook Update (6/27/14) and Topping Scenarios (7/3/14). Chart 5 to Chart 8 update the two surviving scenarios.






We also track a bullish scenario in Chart 5 as follows.  The current pullback is wave b-down of (e)-up.  The pullback ended at the recent low.  Wave c-up of (e)-up should deliver a new high before topping.