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NYSE Bullish Percent

The NYSE Bullish Percent Index has fallen to 59.31%, giving a strong bear signal.






Treasury yields

The yield on 10-year treasury notes broke through resistance before retreating back below 4.50%. The yield is consolidating in a narrow range below this level; a breakout below the pattern would signal a re-test of support at 3.50%. 

The yield differential (10-year T-notes minus 13-week T-bills) is healthy at 3.0%.






Gold

New York: Spot gold has recovered to just above $390.00. The metal still appears headed for a test of support at $375.00.





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ASX Australia

The All Ordinaries made a false break below support at 3500 before rallying on strong volume. The index is still in a consolidation pattern. An upward breakout, followed by a pull-back that respects support at 3550, would confirm the up-trend.




A secondary correction or a consolidation that respects support at the previous high of 3450 will be a long-term bull signal.
A fall below 3350 would be a bear signal, indicating reversal of the primary trend.

Twiggs Money Flow continues to signal accumulation.


Point & Figure - Retracements

Retracements (or corrections) during a trend tell us about the strength of that trend. They test the strength of buyers' or sellers' commitment and establish a base for further gains (or losses). There are four major categories:
  • long retracement
  • overlapping retracement
  • short retracement
  • no retracement - during an upward/downward spike.

Long Retracements

A long retracement signals trend weakness, especially when it follows a spike.
  • Higher prices after an upward spike may be unsustainable. 
    Be on the alert for a short reaction followed by a change of trend.
  • The same applies to a long retracement following a downward spike: lower prices may be unsustainable.
The All Ordinaries displays an example of a downward spike [3] followed by a long retracement [4]. This leads to a short reaction [5] and a subsequent trend-change at [6].





Overlapping Retracements

Retracements may overlap either partially or completely:
  • Partial overlaps indicate a slow but generally stable up-trend. 
    On the Fedex chart below the retracement at [4] breaks through the first line of support, from the high of [1], and overlaps with column [2], indicating a slow up-trend.
  • Complete overlaps form equal lows in an up-trend (or equal highs in a down-trend) and generally indicate consolidation, establishing a base for further gains.




Next week - short retracements.


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