It should be a pivotal week

  • Posted by
  • on September 3rd, 2012

 

Readers of our stream will recognize the following chart: it was our road map for all of August and one that we have posted throughout this summer at least a dozen times.    It’s rare to see a market respect the standard deviation 1 line as well as this one has for August.    Couple things to note:

 

Yellow highlight is market riding up the standard deviation line in which you are in “milk it” aggressive mode;  orange highlight represents when market finally broke the trend and we shifted to more conservative strategy;   the red highlight is what happened on Friday which is very interesting.   We found support on the lower standard deviation 1  line, but stalled at the upper standard deviation 1 line.   The next move through this crossroads will likely decide the future of the intermediate move.

Click to enlarge:

All this interpretation is also confirmed by the moving averages — note how we closed right back on the ascending 20sma on Friday.

Re-test of breakdown, or re-mount of upward slope SMA?   Again, pivotal week.   Summer is over boys and girls; time to bring back A game to the desk.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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