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Tuesday, July 12, 2016

Elliott Wave Update ~ 12 July 2016

Dow made a new high today. But the market is stretched.  The Wilshire has not yet made a new high so we are clinging to the primary count but barely.
But the divergences we have been showing still exist in spades. 
Bond yields hit the lower wedge line and bounced. If this is an ending diagonal triangle expect a sharp rise in yields in a very short amount of time. There may be one more spasm lower, but that is no guarantee.
6 month yield count is supportive of a thrust higher out of a triangle. This will tend to drag the 3 month yield higher and thus spark another Fed interest rate raise which if they did in September I think would be utterly brutal toward the financial situation of the world's debt problems. Banks are already stressed in Europe. A long term trend that won't be fixed.
Yes the NYSE cumulative has gone vertical but the actual underlying index price has not yet made a new high.
Of course the Global Dow lags the most.
Gold is due for a pullback. Bullish sentiment is very high.

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