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Hey, this is pretty cool. The 2nd edition of my new book, Chart Your Way to Profits, isn't going to be shipped for another week or two, but it's already climbing the charts on Amazon. If you use ProphetCharts, you need this book!
This is kind of exciting for me. I wrote my first book, The World Connection, wayyyyyyy back in 1982 when I was 16 years old. I wrote twenty books total, but I've never had a 2nd edition of anything until now.
By the way, I've updated my Author's Page on Amazon. Some readers decried my original photo choice as – and I'm quoting here – "gay". I hope my boring head shot is more to your satisfaction.
Although the broad market was down 1.3%, a couple of sectors still managed to hang onto weekly gains: Automobiles and Parts and Technology. Also, 18% of the 148 sectors managed to have gains for the week.
As is usual, I have created a PDF for you which you can download here.
I want to share with you a chart of the $DWCF (Stockcharts symbol), the DJ Total Stock Market Index. This is the index that I use to show the relative performance in the sectors. I use this rather than the $DJUS (Stockcharts symbol) because it has volume information.
Let's take a look at the chart before I start yammering about it:
I have 13/34 week exponential moving averages (EMA's) on this chart. I have noted for you with the purple arrows the crossovers.
I am still of the mind that the market is at an important crossroads. This week, the market was psychologically bludgeoned by (1) evidence of deflationary forces on the market through wholesale prices decline; (2) the Fed's report did not inspire confidence [Would they really tell us if they expected a double dip recession? No.]; (3) consumer sentiment lower; and (4) declining Philly manufacturing index.
I'm practicing equanimity with respect to this market. It has managed to surprise and befuddle many, and I expect it to not veer from that MO as earnings season continues to unfold.
The BIG picture Bollinger Band chart work on the emini S&P 500 shows that the recent vertical upmove from 1002.75 to 1099.50 traversed the April-July down-sloping price channel completely. But during the last 4 sessions it failed to hurdle the upper channel resistance line in the vicinity of 1095-1091.
Today's decline confirms the failure to hurdle the down trendline, and may confirm a failure to sustain above the declining 50 DMA (1082) as well. The mid-point of the BBnds is at the 20 DMA (now at 1062.70), but keep in mind that the average is still declining and failed to flatten out and turn up despite the 100 point vertical move in the e-SPU.
This is a very negative signal– a still-declining 20 DMA, which warns us that if the e-SPU continues lower to test the average, it will represent little or no support in its current position. Bottom line: As impressive as the July upmove has been, it failed to inflct significant damage to the dominant downtrend off of the April high, and in fact looks like it added another coordinate along the down trendline at 1099.