7-16-17 Market Commentary

 

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Market Breadth: With this past week’s market advance, our Bull/Bear Point and Figure Ratio at 1.35 rose from 1.29 last week, and continues within bullish territory. The total count of securities in bullish or bearish patterns decreased fractionally 2825. The count of bearish stocks decreased 3%, while the count of stocks in bullish patterns increased 2%. The Sand 2 Pirls P&F Market Breadth Summary Chart shows us a market now seven weeks in bullish territory. Paid subscribers have access to the OpenOffice Calc data from which the chart is generated.

The well known market breadth indicator, the NASDAQ McClellan Summation Index (NASI) rose 26 points for the eighth advance in twelve weeks. At a positive 165.05 points, it continues below all seven tops above +100, and it continues above all four bottoms below -100 in the last 3 years. 

Volume Analysis: In this week’s volume analysis, the NASDAQ Composite Index ended in neither Accumulation nor Distribution mode with average daily volume higher than the prior week. In the last two weeks the NASDAQ had three (3) Accumulation days and one (1) Distribution day. (Accumulation days are counted when the index closes up on higher volume than the prior day while Distribution days occur when the index closes down on volume higher than the prior market day.) Last week the NASDAQ ended in neither Accumulation nor Distribution mode on lower average daily volume.

Momentum: The CCI(20) daily is now at +151.22, up from -67.41last week. At Wednesday 7/5 close, the CCI(20) daily had 6 consecutive days below zero for a change in Woodie’s trend to Down. At Tuesday 7/11 close, the CCI(20) went back above zero and now has four consecutive days there for a very possible change of trend back to Woodie’s Up at next Tuesday 7/18 close. We wait for the CCI(20) daily to return to the +/-50 range for another ZLR (Zero Line Reject) entry signal.
In Woodie’s CCI trading system, six consecutive bars above or below zero are required for a change of trend. The Weekly CCI(20) of the NASDAQ Composite Index began a Woodie’s up trend sixty-three weeks ago, while the Daily CCI(20) began a Woodie’s down trend one week ago.
The CCI(20) weekly has risen to 99.51 from 52.95 last week. We await the return of the CCI(20) weekly to the +/-50 range for another CCI(20) weekly trade.
Industry Rotation the last two weeks: All of the top five industries are  positive and only two of the bottom five are negative. Summary: Some Tech on top; Gold & Silver and REITs on the bottom. Bullish: Semis PHLX, Computer Hardware has left the bottom five. Computer Hardware, and CompTech have entered the top five. Disk Drives have left the bottom five. Bearish: EITs have entered the bottom five. Gold & Silver PHLX continues in the top five. KBW Bank and Brokers have left the top five.
Focus this week: From www.zerohedge.comBitcoin, Ethereum Plunge Accelerates As Scaling Deadline Looms“. The following are some key points.

  • Yesterday it was Bitcoin, today it is Ethereum that is taking the brunt of selling pressure (down 20%) but the dumping of virtual currencies is evident across the entire crypto space with the biggest market cap coins tumbling to 2-month lows

  • Once again it is the so-called ‘civil war’ that is weighing on the entire virtual currency space as we noted previously, behind the conflict is an ideological split about bitcoin’s rightful identity..

  • Bitcoin traded as low as $1830 early this morning to two-month lows… as one veteran of the cryptocurrency trading space told us, “shit’s getting real, no one is sure what happens after August 1st , so traders are taking profits, squaring positions into the scaling deadline.”

     

  • But Ethereum is getting battered today, down 20% overnight to 2-month lows…

     

  • As areminder, below is an outline of the main events that could unify or divide bitcoin:

    By July 21: SegWit2x software is released and supporters begin using it.

    July 21 to July 31: The community monitors how many miners deploy SegWit2x:

    If more than 80 percent deploy it consistently, that should signal community-wide adoption of SegWit and the avoidance of a split, at least for now.

    But if a majority do not deploy, expect anxiety within the community to grow as the focus shifts to the Aug. 1 deadline.

    Aug. 1: UASF is deployed by its supporters, who begin checking if bitcoin transactions are compliant with SegWit.

    If a majority of miners still do not deploy SegWit2x or otherwise accept SegWit, and if UASF supporters do not back down, then two versions of bitcoin’s blockchain could come into existence: a UASF-backed one where only SegWit transactions are recognized, and another where all trades — SegWit and non-SegWit — are recognized.

    If a split occurs, bitcoin will likely begin existing on both blockchains in parallel, resulting in two versions of the cryptocurrency. Expect traders to quickly re-price the value of both, likely leading to massive volatility.

  • “It’s moderates versus extremists,” said Atlanta-based Stephen Pair, chief executive officer of BitPay, one of the world’s largest bitcoin wallets. “It depends on how much a person values the majority of people staying on one chain at least for a little while longer, versus splitting and allowing each pursuing their own vision for scaling.”

–Donald Pirl www.s2pmarketsignal.com


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