7/22/2015 The leading authority in Lindsay market analysis Page 1

DailyCommentary Seattle Technical Advisors.com Ed Carlson, CMT ed@seattletechnicaladvisors.com

US Equities

US Equities fell on Tuesday; SPX -9.07, DJIA -181.12, and NASDAQ -10.74. Lindsay Middle Sections point to forecast lows on July 24 (Multiple Cycle) and July 31 (Basic Cycle). A seven day spread between forecast dates doesn’t instill much confidence that the two are pointing towards the same date. Fortunately, we have other arrows in the ‘hybrid’ quiver. Two Micro-cycles converge on July 30 and 31. A Mirror Image count of 69 days extends from the low on 3/11/15 to the high of 5/19/15 to a possible low on Monday, July 27. A 222-day interval counts 223 days from the 12/16/14 low to July 27. Finally, while it has nothing to do with Lindsay, a full moon is due on July 31. Next week is definitely the “kill-zone” for the correction but narrowing it down is proving to be more difficult than usual. We’ll keep our eyes peeled for a reversal day.

Small Caps (RUT) lost 0.45% on Tuesday but topped with the Dow last Thursday. If RUT breaks the July low at 1,226, it is headed to 1,214. A break of 1,214 will trigger a bearish head-and-shoulders formation that measures a minimum decline to 1,125.

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Developed Markets

EuroStoxx 50 failed to break through resistance at 3,689 and fell 1.17% closing at 3,646. Look for support from the 89-dma at 3,588. The trend for equities is up until the Euro (upper) bottoms.

Nikkei 225 gained 0.93% to close at 20,842. BWI turned up in confirmation even though the index is still 26 points below its June high. A short-term cycle high is expected July 23-28.

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Emerging Markets

MSCI Emerging Markets (EEM) gained 0.26% and closed at 38.52. After a high this Thursday, look for a decline to near Aug. 5. Price target: 30.50 (…but probably not by Aug 5).

Shanghai Composite (SSEC) gained 0.64% to close at 4,018 and still below the 38.2% retracement of the June decline at 4,100. BWI confirms the rally. The index made a new high in the July bounce on Monday but relative strength (lower) does not confirm that new high yet.

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US Treasuries

TNX lost 1.35% to close at 23.40 below the 30-dma and printed an engulfing bearish candlestick. Cycles forecast a high in late July. The 10yr German Bund (lower) looks like it is tracing out a bullish flag pattern.

Currencies

US Dollar dropped 0.75% to close at 97.43 making me wonder if the cycle high due Friday came early. A close below 96.50 will confirm it.

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Euro gained 1.04% to close at 1.095 after finding support near the 61.8% retracement of the March rally.

Yen found support at the 76.4% retracement of the June rally and gained 0.27%% closing at 80.72 and printed an engulfing bullish candlestick.

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Commodities

Crude Oil found support at the 61.8% retracement of the March rally and gained $0.21/bbl. to close at $50.36. A 40-day cycle low is due on July 24 – the same day as the cycle high in DXY. Sentiment has become oversold (contrarian bullish).

Gold lost $3.30/oz. to close at $1,103.40. Having reached our price target and a cycle high expected this Friday in the Dollar we should be looking at a low here despite the confirmed sell-mode. The short-term price oscillator and the detrended oscillator are both oversold warning of a bounce today but I’d be hesitant to get long before Friday. Sentiment has become oversold (contrarian bearish) and that was before Monday’s sell-off.

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