Round Numbers

posted Aug 4, 2014, 9:26 AM by Katie Shook

August 4, 2014

I know I’m supposed to be on vacation, but the end of last week was enough to warrant me keeping an eye on things.  Here’s a brief summary of what you’ll want to watch:

1900 is the round ‘support’ number.  It’s actually more like 1887 — but psychologically the 1900 level means something.

1925.  We arrested the free-fall at this level.  However, the overall price pattern is still negative.  So while we could see a slight bounce Monday, the key number is 1953.  A close above this level would negate most of the steep pull-back.  A failure to get back above 1950 indicates a pretty high probability for a continued pull-back.

And finally, the BigFoot database…  you guessed it.  There was a pretty significant signal shift.  We’re now at just below 67% long.  So the underlying positions of this market continue to show signs of deterioration.  It’s worth noting that the bigger shift was from buy to wait though — not from wait to sell.  So again, this week will be very telling.

Asian markets have shown a bit of a turn-around at the time I’m writing this piece.  The futures markets also are indicating a positive open so far.  How Europe fares will have a definite sway though.

I’ll continue to keep a watch on things out of the corner of my eye, but expect updates to be a bit more haphazard this next two weeks.  And by all means — don’t get caught up in the emotion of this stuff — the whole point of following a disciplined process is to keep those emotions in check.  Besides, what did worry ever accomplish besides increasing antacid consumption?

Be well my friends.  Aloha.  And may the markets hold support at 1925 and never look back!

Weekly Estimated Range

Weekly Estimated Range 8-4-14

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