Coolhand's Market Analysis

The rally off the February lows seems to have either ended or paused over the past few weeks and there are plenty of mixed indicators to choose from in terms of trying to ascertain where the market goes from here.



The NYSE, which is probably the best exchange to gauge the overall health of the stock market, shows us that price peaked more than a year ago and more recently hit a double top since October, which would seem to be bearish. But is it too obvious? We are now in the weaker part of the 6 month cycle and this weekly chart shows us how far the market climbed since February, so aren't we due a fairly large pull back?

It all depends on in-flowing liquidity, which has been very supportive for this market since mid-February. And currently, liquidity is still quite supportive so betting on significant downside at this point is not without risk. It wasn't all that long ago that the market seemingly went up for months on end without more than a moderate pullback (look at the chart from the Summer of 2013 to the Summer of 2014).

This weekly chart shows that the NYSE has had 2 down weeks in a row and one could easily think it's time for a significant drop, but those 2 down weeks could be a bull flag too.

They aren't making it easy, are they?