Stocks & Equities

Possible Short-Term Top; No Bear Market on the Horizon

We are starting to see weakening in breadth data that is suggestive of a possible short-term correction in the market. With the highly anticipated upcoming September 17-18 FOMC meeting, we could be in store for some volatility and market weakness.

While it is highly anticipated that the Fed will begin to taper its quantitative easing (QE) program next month, what the market is uncertain about is by how much and at what pace. This uncertainty will likely keep the market’s near-term upside potential limited and may open up a small correction or consolidation.

Once we have the uncertainty behind us the markets are likely to head to new highs given how robust the market currently is (excluding short-term divergences) as well as having an accelerating economy, as seen by the sharply rising service and manufacturing PMIs that were released last week.

One negative divergence I am seeing is the 200-day moving average (200d MA) for the daily NYSE advance-decline line, which is diverging with the S&P 500, as is the 20d SMA of the NYSE percent new highs minus new lows. While we are seeing some negative divergences in the two indicators below, they remain in positive territory and we would need to see dips into negative territory before even remotely considering the potential for a major market top.

(Click HERE or on image for larger view)

01-Divergences

 

….2 more charts & read more HERE

 

RelatedJeff Saut: The Market Is Overbought – Raise Some Cash

Related: Martin Armstrong: Dow May Double by Late 2015

Hype over the Hyperloop accelerates as Elon Musk’s ‘big reveal’ nears on August 12th. 

….read more about this remarkable man in these articles:

To the Moon & Back With Living Legend Elon Musk

Hype over Hyperloop as Big Reveal Nears

About SpaceX (Musk’s SpaceX has 3000 employees and just finished successfully launchng a Rocket that flew to 1066 ft, hovered then landed smoothly back on Earth)

 

 

 

 

 

U.S. stock-index futures rose, indicating the Standard & Poor’s 500 Index will rebound from three days of losses, after U.S. jobless claims fell in July and China’s trade data rose more than estimated last month.

Tesla Motors Inc. surged 14 percent after reporting second-quarter results that surpassed analysts’ estimates. Groupon Inc. jumped 26 percent after the daily-deals company appointed a new chief executive officer and reported a smaller-than-projected loss. McDonald’s Corp. jumped 0.9 percent after same-store sales topped analysts’ estimates as new wraps and breakfast food attracted U.S. diners.

Futures on the S&P 500 expiring in September rose 0.3 percent to 1,693.90 at 8:37 a.m. in New York. Contracts on the Dow Jones Industrial Average increased 55 points, or 0.4 percent, to 15,497 today.

Today’s data “could be a sign that we see some stabilization in Chinese activity,” said Patrick Moonen, who helps oversee $244 billion as senior strategist at ING Investment Management in The Hague. “I don’t think the U.S. equity market is only a matter of monetary policy. As the economy recovers, the earnings backdrop will become the most important element.”

….read more HERE

The firm is among more than a dozen financial institutions, including Morgan Stanley (MS) and Citigroup Inc., accused by the European Commission last month of colluding to curb competition in credit derivatives

…..read more HERE

 

Shares in Tesla Motors, the electric carmaker, hit another new high in after-hours trading on Wednesday, despite a quarterly dip in revenues, as sales of its Model S beat expectations and deliveries began in Europe.

Elon Musk, Tesla’s chief executive, said the California-based manufacturer had delivered 5,150 electric vehicles in the three months to June 30, above its forecast of 4,500, as Tesla expands into Europe and Asia.

 

….read more HERE