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Not So Fast July 11, 2015

Posted by Tom in Thoughts.
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The media would like to think that with the (likelihood of) the Greek situation being resolved that the “all clear” has been sounded.  I’d wait until next week before I’m going to get very enthusiastic about the market.  That’s because China remains a virtual unknown issue and some major earnings reports are coming out next week.  Especially important will be the guidance going forward on earnings and the “causes” for that.

Will major multinational corporations site Europe or China as a cause for an  earnings slow down, or will things just keep humming along?  We’ll have to wait and see.  In the mean time I fell that the chart below shows a potential Distribution structure.  (But I’m always looking for problems on the horizon.)  Lower Lows and lower Highs are signs of weakness (SOW).

NASDAQ

Of note is the very light volume on Friday (the last bar).  Sure the selling has abated for now (note money flow) and we held the 4905 level and bounced, but is that just setting up the LPSY (Last Point of Supply) structure?  We’ll find out early next week.  I also note that Market Sentiment remains bearish / negative. Hence my comment “Not So fast”, as I don’t think that we’re “out of the woods” just yet.

Sector strength has been bouncing around so fast lately that I don’t think it’s worth while to post anything on it. But if there is a buying breakout coming, you can bet that the previous sector strength will be where the leaders are again.  Have a good week.  ……  Tom  ……..

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