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Friday, August 16, 2013

Friday Weekly Charts

Yeserday we undercut the exponential 50dma, oday we undercut the middle pivot point, but perhaps more significantly, we hled the simple 50dma, and are now probably going to get a bounce. That is, if the bond market cooperates, and they just might not. Bernanke has a whole weekend to try to convince the markets that he didn't mean what he said, but that may be too little, too late. The market seems to be heading for that big correction that is overdue, but it will bounce a few times in the process, giving ample trading opportunities.
The weekly chart gives a little different perspective: it is holding the 10 week line, and volume is very low on the way down. However, the speed of the drop indicates that this is probably not over: even minor corrections have lasted several weeks, and this one is only two weeks on. We don;t know how far it well drop, but the pivot points give us a pretty good guide.

The Nasdaq, which is a bit less sensitive to interest rates, is holding u best, and here we are looking at what looks like a fairly minor pullback. I don;t see an apocalyptic drop coming here, at least not this month.

The Russell 2000 went way past any resistance it should have had above the R2 pivot point, but it has come back to that resistance level where we will now see if it is support. I am not counting on it.

The yield on the 10 year Treasury started moving up again this week, afer a very brief pause after the last big move up. It is now up against the R2 pivot point: what Bernanke can't stop, the pivot point might. Somehow, I doubt it.

Treasury yields have resumed their move up and the market is starting to fell the pinch. We may not have a major collapse this month, but September could be a wild ride.

I will have the new highs update shortly.

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