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Sunday, August 14, 2016

Sunday, 8/14/16 update

From a long term perspective the equities markets continue to show divergences of the blue chips as measured by the S&P 500 as compared to the broader market, represented in the below charts by the NYSE (NYA) and the Russell 2000 (RUT):


My current long term count has the ES/SPX working out at least one 4th/5th wave sequence of the bull market that commenced at the MAR 2009 lows.  A narrowing of relative strength in equities to favor blue chips vs other issues is a characteristic of 5th waves, so the long term perspective is confirmed by the above charts.  The obvious message is that a bear market of some significance is getting closer.

On the short term, crude oil looks to have established a low at almost exactly a 50% retrace of the early February to early June rally:


This could provide some lift to the ES/SPX.

Current EW counts for the ES can be found here.

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