Are we possibly approaching stage 3 on the Weinstein scale? Or, are we continuing Stage 2 after getting a bounce? The GDOW and DOW both have flat moving averages, while the S&P and NASDAQ have bounced off their MA.
It looks like we are approaching a correction, with the major indexes touching their 30 week moving average lines or going just a little bit below. We are due for one, the question is whether it will be a large or little correction.
The Stage Indicators are beginning to point to weakness in the market with the major indexes about to breach their 30 week moving average line. We are due for a pullback and may see one in the coming weeks.
The FINVIZ.com heatmap from Friday is mostly Red.
Drivers appear to be financially related vs. COVID. China's Evergrande may not be able to pay it's debt, talk of Fed tapering, and debt ceiling debates.
Here is a snapshot of the S&P which appears to be entering into Stage 3.
This past week was a downer, it just seemed the bad news wouldn't stop. Delta variants, Afghanistan pull out blunder, and tropical storm Henri! Maybe it's just me, but I am getting tired.
From a stage analysis point of view, things appear
to be okay. Some of the indexes are flirting with their 30 week moving
average lines, but are still above the line.
Interesting bitcoin news:
https://news.bitcoin.com/jpmorgan-wells-fargo-launching-bitcoin-funds-sec-filings/
From a stage analysis viewpoint, we are in Stage 2 Accumulation (see stage analysis overview here) with the market continuing to go up.
One of the gauges I like to look at is the Dow vs NYSE Advance-Decline. (Barron's used to produce it but stopped so I make my own chart.) It's a bad sign for the market when the Dow is advancing more than the NYSE, which we see in March of 2020 when COVID hit. Likewise, it's a positive sign when the NYSE is above the Dow. That's where we are now. It's one of the biggest divergences I've seen in a while.
Stories of interest:
Let's look at how the market is performing so far this year. It's been a good year so far.
If we look at the charts going back to September 2020, we can see visually how things are progressing.
For the first time in a while, markets were down at the end of the week. The worst since February.
Contributing factors include expected rate hikes by the Fed.
From a stage analysis view, we are still flying high, but and this is a big but, the 3 major indexes look poised to go below their 30 week moving averages. If this happens we may be entering stage 4.
CNN's Fear and Greed indicator is the lowest it has been in quite some time.
