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Summary for Week Ending 15th August 2003
Again this week we had a series of simply nothing happening.
Volume has disappeared and the volume for Friday was very low. This might
be blamed on the blackout, but really I think it is simply disinterest.
Whilst nothing continues to happen, then we can expect nothing to continue
to happen. Its a vicious circle as an increasing number of players will
move to the sidelines and wait for a trend to develop.
Last week I was looking at the 13th as a possible change of trend date.
We didn't get anything out of it, but the market was telegraphing this
on Monday and Tuesday with little or no movement. When looking a a date
forward, expectation is always that the market will 'run into' the proposed
date, and so give the impression that it is the last gasp, When you get
this kind of movement you have far more confidence in the date. As I said,
we didn't get this movement, instead we have seen the market creeping
around like a thief in the night. We had a minor outside day on Thursday
but not a reversal pattern, so Friday could have been anything. I do not
expect that the aftermath of the blackouts on Friday had anything to do
with the languid performance. Looking at the S&P, we saw a down day
on Thursday, giving us a lower swing high, but this was negated on Friday
with a small crawl forward. What is most important to look at here is
that its 7 trading days since the Aug 6th low and we have not yet climbed
above the previous swing on 31st July. The swing down was only 4 days,
so taking this into account it is obvious that the market is in a technically
weak position.
The markets have been compressing for some time now and making sense of
it all is getting more difficult. To ease the point of view, this weeks
charts are the weekly charts of the S&P and the DJIA. Following on
from the above discussion we can now look at the weekly DJIA chart. It
looks bullish doesn't it ! We can see clearly that we have had 4 consecutive
higher swing lows and as yet no lower swing high. the S&P 500 is also
similar except that we have the lower swing high and as such could be
considered to be forming something bearish. It is this confusing sequence
of patterns that is making the markets such a difficult place to be at
present. When they stop trending, its always better to sit back, have
a coffee and wait for the market to show its hand.
Looking at a time perspective, the most recent decline took 23 days. 12
days forward gives us Monday 18th.
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