Technically Speaking.
The market continues to display a full bull configuration. The Dow Theory divergence that existed in August, between the Dow Industrials and the Dow Transports, has completely disappeared. In fact the Transport Index, which had been faltering, having had a confirmed price cross-over on its 200 Daily Moving Average, is now technically leading. This is particularly bullish given the recent rise in oil prices. An additional indicator of current technical strength is the fact that the recent pullbacks in Apple, Amazon and Oracle did no damage to overall market sentiment.

The VIX remains “nailed to the floor” of its trading range, indicating that there is above average complacency in evidence, despite the imminent commencement of Quantitative Tightening and an 80% chance of an interest rate rise in December. Thus Mister Market is expecting a strengthening economy to take these events in its stride. This remains to be seen but that is a discussion for another date, July - September 2018, or thereabouts I reckon. For now the “smart money” is on the long side.

With earnings season beginning this month I expect the market to range trade for 4 weeks or so but come November, should Trump succeed in moving his tax plans forward with Congress, I anticipate a strong “Elliott Wave Pulse” upward. This will indicate an early commencement to a “Santa Clause” year-end rally. In this instance fate will favour the brave. Strong bulls markets always over-value, regardless of fundamentals. That is the lesson of financial history. Don’t get left behind due to: “paralysis by analysis”. Please realise markets have not gone parabolic, “yet”.

Chart: Dow Industrials: Daily.

Chart: Dow Transports: Daily.

Chart: USA Oil Fund: Daily.

Chart: VIX: Daily.

Chart: Apple: Daily.

Chart: Amazon: Daily.

Chart: Oracle: Daily.

Charts: Courtesy of StockCharts.Com

Christopher Quiqley

B.Sc., M.M.I.I. Grad., M.A.
http://www.wealthbuilder.ie

Mr. Quigley was born in 1958 in Dublin, Ireland. He holds a Bachelor Degree in Accounting and Management from Trinity College Dublin and is a graduate of the Marketing Institute of Ireland. He commenced investing in the stock market in 1989 in Belmont, California where he lived for 6 years. He has developed the Wealthbuilder investment and trading course over the last two decades as a result of research, study and experience. This system marries fundamental analysis with technical analysis and focuses on momentum, value and pension strategies.

Since 2007 Mr. Quigley has written over 80 articles which have been published on popular web sites based in California, New York, London and Dublin.

Mr. Quigley is now lives in Dublin, Ireland and Tampa Bay, Florida.

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Christopher M. Quigley Archive

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