Market Direction and Stock Trends

[DiscoverGold]

Technical Market Report
By Mike Burk | August 14, 2017

The good news is:

• The market has been following the average pattern for the 1st year of the Presidential Cycle pretty closely and that pattern turns positive in about 6 weeks.

The negatives

The secondaries have been leading the way down and new lows exceeded new highs the last 3 days of last week. There has been no sigh of a bottom.

Progressively higher index highs have been accompanied by progressively lower numbers of new highs.
There is nothing pretty here.

The positives

The market is oversold so there could be a bounce, but, at this point, everything is confirming this decline.

Seasonality

Average returns have been modestly up over all years, but very negative during the 1st year of the Presidential Cycle.

Conclusion

The market is following the average seasonal pattern for the 1st year of the Presidential Cycle pretty closely. That pattern calls for a bottom in late September. A premature bottom, if it occurs, should be indicated by decreasing new lows on a down day and a firming of the secondaries.

There is no sign of that now.

I expect the major averages to be lower on Friday August 18 than they were on Friday August 11.

http://www.safehaven.com/article/44661/technical-market-report-for-august-12-2017

• DiscoverGold

Click on "In reply to", for Authors past commentaries