Key Takeaways

  • Trends & momentum remain negative short-term for US Equity indices and SPX requires a move back over 4653 to expect this weakness is complete
  • WTI Crude should be nearing support for a bounce starting next week which should help Energy recover
  • Homebuilders remain a very strong technical group and should be favored.

Thursday’s rally, is similar to Wednesday’s bounce, failed to show sufficient strength to think a low is in. Overall, daily closes over 4653 will be necessary, and until then, this rally could still weaken further into next week. However, broader-based gauges of equities like the Value Line Geometric Average as well as the Russell 2k are now nearing support near summer lows where stabilization should occur. Given the extreme drop off in breadth in recent weeks, a monumental effort is necessary along with broad-based participation to have confidence.

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WTI Crude has nearly reached initial support, but shape of the bounce will be important

WTI Crude has now been down the last five of six trading sessions and lower by six straight weeks. This area in the low $60’s is important support near August lows

Wave patterns are nearly complete on this initial pullback, and Ichimoku Support lies directly below. H...
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