Breadth Thrust Misses

According to Prophet, NYSE breadth just missed triggering a Zweig Breadth Thrust.  Recall we needed to see .615.  Today, (the 10th day) breadth closed at .611.  To state the obvious, this does not mean the market will instead correct.  Today, on the lowest volume day of the entire year, SPX had no trouble tacking on another 10 points.

It’s worth noting, however, that it did complete a bearish Bat Pattern at the .886 Fib.  In an unrigged market, a Bat Pattern would be good for a retreat to at least the .786 (1972) and more commonly the .618 (1958) or lower. Fed minutes are due out tomorrow at 2pm ET.  So, of course, anything could happen.

We should expect that the end of QE will ding the “markets” significantly [then again, I thought the same thing in June when the worst GDP print (-2.9%) since the financial crisis hit…and, SPX gained 10 points on the day.]  And, to the extent the minutes reinforce the timing/certainty of the end, or hint at a quicker interest rate rise than investors would like, they could exacerbate any downside potential.

2014-08-19-SPX BT Prophet

Stay tuned…

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