The dollar now has a good chance of rallying from its spring position and beginning a new upward trend.
The bonds are very suggestive of a turn. First note all the wide range days beginning June 11 and then July8 and July 21 and July 31. The ease of movement is definitely up. It even takes the weakness in the first three says of August trading to reverse the strength of the last 2 days in July. Finally today the market very symmetrically found strength at the July 20
th support level and closed at the top on a narrow range, suggesting supply might be overcoming demand. At the least it is a reversal day. In general money must come out of stocks to support bonds.
Today, after taking out yesterday's high stocks fell to close in the lower half of the range on the highest volume in 2 1/2 months. The previous three closes were in a narrow range and with the high volume and low close today that does not look like absorption but rather supply overcoming demand.
Finally on the
intraday please note the bouts of heavy liquidation on down waves. These eventually penetrated the low of the last few days trading range implying a potential downtrend. This would be confirmed by a lower high. The rallies today to 11:15,12:45, and 1:30 all end on low volume or show a failure of volume to
increase as demand does not enter. During the rally at the end of the day the buying on the
usual ramp job was stuffed by supply. We have all the makings for a top and a defined lower high will confirm it.
The dollar now has a good chance of rallying from its spring position and beginning a new upward trend.
The bonds are very suggestive of a turn. First note all the wide range days beginning June 11 and then July8 and July 21 and July 31. The ease of movement is definitely up. It even takes the weakness in the first three says of August trading to reverse the strength of the last 2 days in July. Finally today the market very symmetrically found strength at the July 20th support level and closed at the top on a narrow range, suggesting supply might be overcoming demand. At the least it is a reversal day. In general money must come out of stocks to support bonds.
Today, after taking out yesterday's high stocks fell to close in the lower half of the range on the highest volume in 2 1/2 months. The previous three closes were in a narrow range and with the high volume and low close today that does not look like absorption but rather supply overcoming demand.
Finally on the intraday please note the bouts of heavy liquidation on down waves. These eventually penetrated the low of the last few days trading range implying a potential downtrend. This would be confirmed by a lower high. The rallies today to 11:15,12:45, and 1:30 all end on low volume or show a failure of volume to increase as demand does not enter. During the rally at the end of the day the buying on the usual ramp job was stuffed by supply. We have all the makings for a top and a defined lower high will confirm it.
