A "Line in the Sand"

Now next week will be important. Does the "buy the dips" folks come back or does the "sell the strength" folks come into play. The market "breath" (advance decline ratios) has been looking very weak for over a month; less and less stocks were holding the market indexes up. When I look further at other Breath indicators (Up/Down Volume, New Hi's/Lo's) I see a potential that this would be more of a Re-Accumulation structure rather than Distribution. In either case I think that we're at or near an important price level that will confirm or reject one structure or the other. With the FED Jackson Hole meeting next week that may be a news catalyst in either direction. (You can almost taste the hesitancy in this market; no one wants to miss the next move for sure.) And of course the continuing saga of Covid is yet another wild card. So far the market has discounted much of the virus since the economy and earnings are doing pretty well, at least for now. One last observation: Volume last week on those red bars was at best average. There doesn't appear to be a rush to the exit right now.

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