The video in this report is only accessible to members
The video in this report is only accessible to members

Markets have entered a window for potential short-term trend change, but Thursday’s decline failed to result in any downside follow-through following the BOJ decision.  Near-term, an SPX-4500-4620 range still looks important, and upside looks limited before SPX starts to turn lower to test 4500.  Ultimately, I expect an August decline down to 4350-4400 before SPX gets over 4650, making upside limited.

My short-term call might have “jumped the gun” a bit, but I do not expect that US Equities have much near-term upside, and should be on the verge of turning lower.  In my experience, bearish engulfing patterns following a period of lackluster breadth following a run-up normally extend lower.  However, Friday’s recovery certainly might have postponed this by a few days. 

While near-term upside could happen briefly into next week, the reasons I felt that markets could weaken are still in place.  However, the failure of price to have violated existing uptrends on SPX, NDX and DJIA remain a short-term hurdle for the bearish case.  

Looking back over this past week, eight sectors out of 11 showed declines in absolute terms when eyeing the Equal-weighted Invesco ETF’s which co...

Unlock this article with a FREE 30-Day Trial!

An FSI Pro, or FSI Macro subscription is required in order to access this content.

*Free trial available only on a monthly plan

Disclosures (show)

Get invaluable analysis of the market and stocks. Cancel at any time. Start Free Trial

Articles Read 2/2

🎁 Unlock 1 extra article by joining our Community!

You’ve reached your limit of 2 free monthly articles. Please enter your email to unlock 1 more articles.

Already have an account? Sign In

Don't Miss Out
First Month Free