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A Quiet Week, but Summers Over . . . . August 30, 2013

Posted by Tom in Thoughts.
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With Labor Day upon us (in the US) and the unofficial marking of the end of Summer, perhaps now we can find out what is really on the markets mind.  Volume has been light and (presumably) the titans of Wall Street are returning from their month-long vacations.

In the last couple of blog posts I indicated 3595 was a likely support level.  I select these levels via a mathematical algorithm that calculates them.  I should have used this as a “ball park” (approximate) number, since recent history showed the 3575 level was more representative.  The chart below (green line) shows why the 3575 level is a more significant level because that’s where prices have shown support in the recent past (July 24th to be exact).

NASDAQ

The good news is that we have a pretty firm line in the sand to watch and monitor.  A Close below that will indicate a problem in the market.  Many of my market model indicators have turned Bearish, but I really need that break to happen, otherwise a whipsaw is a stronger possibility.  I note that with volume light, there has been no wholesale rush to the exits by institutions.  The Syrian situation may throw a money wrench into the whole scenario, but I have to let the market address and react to it.  It’s public knowledge so it should be “discounted” in the price.

Actually, the market is holding up pretty well considering.  Corporate earnings are OK, economic news is mixed but generally positive and Congress is, well they do what they have been doing for the past 5 years . . . not much.  September is a traditionally weak month, and talk of political wrangling makes it that much of a possibility to repeat.  The next 4-6 weeks could get volatile and “hairy” for the markets.  We must be extra cautious in here; because . . the titans are back from vacation and they want to make money before the end of the year.  Let’s make sure it’s not at our expense !

I am working on my monthly client newsletter, which will have the Top / Bottom Sectors and the Price & Accumulation/Distribution charts so I won’t duplicate them here.  That newsletter should be posted on the website by Monday.  Just click on the tab above to download the PDF file.

Have a great Labor Day weekend.         …………….  Tom  ………………..

chart courtesy of MetaStock; used with permission.

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