All financial markets might be sideways into next week’s FOMC announcement.

By the end of “walking in the shade”, the last volume of Doris Lessing’s autobiography, written in 1997.

 

Today JNK bonds signaling risk on while the other sectors remain red, IYT, XRT, IWM, what does that mean? Fed is still very much supporting the market, but the economy is continually slowing down. Eventual outcome?

"When all the experts and forecasts agree – something else is going to happen."

Indices are entering rollover. Those two weeks are the worst two weeks of trading cycle while open interest rolls from September to December. New, fresh direction often comes after expiration.

In a seemingly invulnerable, one-sided market, the only chance bears have, is in finding a slight opening and exploiting it with full-blown aggression. 

As it stands now, we know how early it truly is both in today's session and overall with where we are in the bull run to make any presumptions about a market top, let alone a standard correction even underway.

But we do know that bears actually scored some points this morning with their downside pressure on the IWM, ETF for the small cap Russell 2000 Index. 

To be sure, without AAPL, FB, GOOGL, MSFT, TSLA and the rest of the gang at least dipping a bit, there really is no broad market correction of which to speak, only constant and grinding rotation like we saw during the summer. 

In summary, the line of least resistance is still to the upside. Continue to raise stops where appropriate and, most importantly, adhere to your stops if they are hit. "One of the worst forms of complacency is ignoring your sell stops in a bull market."

"Be happy."

"We interrupt this program with a special bulletin: America is now under martial law. All constitutional rights have been suspended. Stay in your homes. Do not attempt to contact loved ones, insurance agents, or attorneys. Shut up. Do not attempt to think or depression may occur. Stay in your homes. Curfew is at 7PM sharp after work. Anyone caught outside the gates of their subdivision sectors after curfew will be shot. Remain calm, do not panic. Your neighborhood watch officer will be by to collect urine samples in the morning. Anyone caught interfering with the collection of urine examples will be shot. Stay in your homes, remain calm. The number one enemy of progress is question. National security is more important than individual will. All port broadcasts will proceed as normal. No more than two people may gather anywhere without permission. Use only the drugs prescribed by your boss or supervisor. Shut up, be happy. Obey all orders without question. The comfort you've demanded is now mandatory. Be happy. At last everything is done for you."

In summary, as long long as $SPX remains above support, one should remain long. If support at 4370 is taken out, that would change things greatly. For now, enjoy the ride.

In summary, everything appears fine, $SP made a new closing all-time high twice this week, but it has not made a new intra-day all-time high since July 29th, so its actually traded in a very tight trading range between 4370 - 4430. A break out of this range in ether direction should give us some momentum.

TLT

As rates go higher there is more pressure on the FED to taper sooner than later. Something to watch here is whether TLT stays down this time or dip buyers come back still calling the taper a bluff.

ZVIA - a different view

 

"In your recipe for success, don't forget commitment - and a deep belief in the inevitability of your success."

Three out of four major indexes are trading at new highs, Russell 2K is lagging.

The SP500 e-mini futures market rallied this week and it looks like the bulls want July to be the 6th consecutive bull bar on the monthly chart when the month ends on coming Friday. That has not happened in 10 years.

Use your mental inherent power - MEMORY

 

A sign of risk in the market.

"If you have trouble imagining a 20% loss in the stock market, you shouldn't be in stocks."

"The market is currently in an uptrend. That could change at any moment and I would put a 70% probability on the S&P finishing the year higher than current levels. At the same time, a break below the June low would suggest a 50% chance of a retest of the 2021 lows, and a 5-10% chance of a 20-30% decline."

The market moves in probabilities. It's all about what's most likely to happen, but it's also about what could happen.

"Pilots are taught to always be ready for emergencies. And you prepare for the unknown by simulating engine failures and mechanical issues. Then if you actually experience an emergency during a flight, you've already planned out your course of action."

Losses happen. Even if your analysis is spot on, and your thesis is well-articulated, the market can move against you.

The key is to be ready for emergencies in your portfolio. Have a "line in the sand" clearly defined for any new position.

"The elements of good trading are: 1, cutting losses. 2, cutting losses. And 3, cutting losses. If you can follow these three rules, you may have a chance." On the opposite side is selling into strength and taking profits, and you can consider doing it now with your extended stocks.

The "pros" were bearish at the bottom and now everyone is bullish. Keep you opinions in check and let the stocks dictate your course of action.