Scoreboard
Most indices finished the week with green weekly candles; however, they barely did so, and it could have gone either way. In fact, the PowerShares QQQ Trust, Series 1 (ETF) QQQ was red. On the face of it, doji candles (indecision) are present, but the price action details were far from boring. Just consider the action in Apple Inc. AAPL down under 110 at one point during the week.
The bulls remain uncommitted, having no real conviction in the bull thesis other than to say, "It's been working for years and why should it stop now?" That being said, things have changed: 1) No U.S. QE; 2) The Federal Reserve is shrinking its balance sheet (anti QE); 3) Rates will be rising; 4) Other global concerns, like falling oil, China threat, Eurozone growth, etc.
Note: Intraday last Friday, markets and TLT (bonds) moved in the same direction. This is new (for the week) and could be that markets are pricing in some hopium that rates not rising in September.
Friday closed strong on the news that the Eurogroup agreed to implement the Greek bailout; however, the storybook has not closed, as Germany is expected to publicize a response Tuesday.
Focus Points
Now that the iShares Russell 2000 Index (ETF) IWM has reached my lower target from a few weeks ago, it is now closer to the lower end of the recent trade (unlike the QQQ). This puts it in a "must bounce" situation, where it cannot afford another whoosh down. The next fast drop could gather momentum and break the stalemate downward. From here it would need further deterioration of sentiment. The fundamentals have not changed.
Other Variables
Facts did not change this week, only sentiment, so no change in thesis.
- Oil: new low. This cannot be conducive of a growing globe.
- Currencies: In flux and they can affect markets.
Tickers
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