The first round of earnings results has been a bust, with the financial stocks struggling to impress. Oil, energy and materials showed further weakness too.
This is during a week where inflation numbers also gave a jittery market more jitters.
From where I sit, not much has changed since last week’s review. The main takeaway from today (Friday) is that there are very few consolidations out there, and even if the main indices make new lows, it still looks like the beginnings of basing activity that could last months.
Of course there will be stocks that lead, and we are starting to see those emerge. Even AAPL is beginning to show signs of life, albeit without a corroborating OVI (yet).
Because I’m travelling with a 3am start, I’m going to make my Mastermind session from Thursday into this week’s review.
This is a time for appreciating the “shape” of the markets, and we covered this extensively in the Mastermind.
There are high probability setups that our algorithms are excellent at finding, but when it comes to market shape, we have potent powers of observation that can make all the difference to your performance.
I continued this focus during Thursday’s Mastermind, which attendees found very insightful, and which you can view in today’s link.
Current Market Behavior:
This is from last week:
Same as last week in that I see evidence that the market is tentatively trying to start putting in a base. The dangers I mentioned still loom large, which is why this base may take a while, and in the short term we have earnings to navigate, starting this coming week.
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Earnings is causing the market to hold its breath, and in the meantime the overall picture shows the market in the beginning stages of a basing period that could last up to months.
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My Longer Term Market Timer, the OVIsi remains firmly in its red zone, which tells me that earnings is likely to be a mixed bag at best. New lows are possible, but I still believe the most severe of this cycle’s downward moves has already occurred.
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The Medium Term Swing Timer has dropped to neutral, while the Short Term Timer produced an up-bar that is a no-go due to a still unconvincing OVI reading for the S&P.
It is indeed peculiar that the Short Term Indicator produces green arrows at this time, but it has to do with Advancers/Decliners and not the magnitude of those moves. Over the long term this has worked well statistically, but as I always say, you need to use discretion, and discretion currently says we ignore those arrows where there is no recognizable OVI type setup.
All the main indices remain weak and have failed the latest tests of their 50-dmas.
Market Outlook:
Earnings is off to a bad start. From last week …
Over the medium term I expect some further choppiness while the markets base over the next few months, while the next cycle’s leaders emerge over the next few weeks.
Stock Selection Using Our Fast Filters:
Today, I have taken last week’s stocks and highlighted the most interesting commentaries from there.
Those included Big Money Footprint setups in both directions, consolidations and stocks from my static watch lists.
Many of the oversold and bearish setups continued to slide. The vast majority of bullish setups didn’t break out.
Software Upgrades
We have some very big news coming in the next few weeks … make sure you keep reading my regular reviews as it’s going to make a very big difference, as well as pave the way for huge upgrades in the future!
That’s on top of the many more important upgrades to follow in late summer / early fall.
Events
Next year’s Miami is confirmed for April 22-23, and as mentioned above, due to a partnership with a Latin American based outfit, the live tickets will be snapped up quickly, so we will give first dibs to our regulars!
We will be sending out discounted hotel links imminently.
This year’s Stocks Summit is confirmed for 3rd December at the London Courtyart Marriott Heathrow, as per last year. More details will follow shortly.
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Remember, you can play the video at 1.25x or 1.5x speed if you want to save time! I have placed all the stocks covered in today’s review in your “Latest Preview” watch list.
