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                  9/2/2015   70+ TigerSoft Charts - 
                  Go to www.tigersoftware.com/HH/index.html 

                   9/2/2015
        New Highs: NASD  13       NYSE    4
        New Lows:  NASD  19       NYSE  21
                                                 
          9/2/2015  Bullish MAXCP Stocks    over $5  
              These will be posted later tonight.               
       231   ----> www.tigersoft.com/MAXMIN/9/2/MAXCP.html
                                 
                                 Bearish MINCP Stocks over $5   
         437     -->  www.tigersoft.com/MAXMIN/9-2/MINCP.html
                      
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     9/2/2015        The market continues to try to repair the damage done by the recent steep13.5%
                           drop.  As long as the DJI does not drop below 15600, the bulls are betting
                           that the current weakness will turn out to be just one more "correction" in a series of now-forgotten
                           corrections in the long bull market since the end of the 2007-2009 bear
                           bull market.  I suspect it is the FED's Open Market Committee which will determine
                           on September 17th by its decision on interest rates whether we have just seen a
                           "correction" or the beginning of a new bear market which will drop the DJI
                           down at least 20%.



                           This week I suggested a "watchful waiting" approach. Too many times the
                           gains the week before Labor Day are wiped out soon afterwards.  Unless
                           you are a very short-term trader,  I think it's best to wait for a new Peerless signal
                           or a decline back to 15700 to buy.  A rally to 16900 would have to be used
                           to do more selling. 

                           My view is that the Buy B16 only registered an over-sold extreme; the
                           next day's B14 did have great up-volume, but this could be considered mainly
                           short-covering.  The much heightened volatility, up and down, simply shows
                           shows the high degree to which computerized trading now dominates the market.
                           The extreme volatility is also a warning of how illiquid the market has become
                           at these levels.


                           Short-term, we also have a rising Hourly DJI trend a rising Hourly DJI's OBV-DISI
                           Line.


                           The most important positive right now is the rising Accumulation Index and
                           the Peerless B17, which appeared the same day as the B14.  Institutions
                           are now supporting the market on all dips just as three months ago they were
                           heavy sellers in June and July.  See below how our new weekly DIA, SPY
                           and QQQ charts really show this underlying Accumulation.

                           Short-term, the 5-day ma for the DIA and SPY are rising, but their prices need to
                           move much higher tomorrow to prevent these mvg. averages from turning down.
                           Also worrisome, the Closing Powers trends are still down.  Professionals are
                           avoiding big commitments right now. See how the (blue) volume declines on
                           up-days and the (red) volume has tended to rise on down-days recently.
 

                          
                                                  We Are in Trouble.

                           Somehow, it is the DJI and SP-500 which will have to lead ALL other markets higher.  
                           The broader US market remains quite weak. 90% of all stocks are below their 65-dma.
                           Somehow the US now must also lead the world markets out of their Deflationary spiral.
                           This won't be easy.  The  de-Industrialization of America and the 35 year decline
                           in its middle class have gravely weakened Consumer Demand just when Foreign
                           demand is in the tank, too.  This is why we watch the Four Horses of the Deflation
                           Apocalypse.  Many overseas markets are in a steep declines, as are Commodities,
                           Oil/Gas and the Chinese market.

                           Friday watch the Jobs numbers closely.  It's true that +200,00 new Jobs have
                           been added in each of the last 3 months,  but it is also true that the recent June and July
                           numbers do show a deterioration both from a year ago and from the previous month. 
                           I think we have to get past simply relying on the standard media's write-ups of
                           these numbers.

         NEW NON-FARM EMPLOYEES IN US
                   8/8/2015  (in 1000s)

                           =============== Previous Comments Here ====================    
 
                           I consider Peerless not to be offering a current Buy or Sell now.  This
                           is highly unusual, but so is the market.  The nearly 1000 point advance
                           in only two days did not even take the DJI above its falling 65-day ma.
                           This gives the appearance of a DJI only making a bear market rally up to
                           resistance last week.  In the next Peerless update (expected to be released
                           on Friday), the characteristics mentioned above will give an automatic Sell S14.
                           In an on-going bear market the S14 would call for selling and selling short.
                           But currently we are not officially in a bear market. A DJI decline of more
                           than 18% from its high is the standard used by Peerless). As such the Sell S14
                           is only a "take profits" signal;.  In fact, the DJI has still not fallen more than
                           14% from its highs so far. You will recall that I have shown here recently that
                           since 1928 77% of the numerous DJI declines of 10% to 13.5% were
                           "corrections" in an on-going bull market and soon brought  recoveries back
                           to their old highs, at least. . So, the new Sell S14 in our market environment
                           only says what I have already said here, namely to mostly go to cash
                           unless you are a very short-trader and can watch the Hourly DJI during the
                           day and want to play the typical recovery that should develop between
                           15700-16000 and sell when the Hourly DJI's uptrend is violated or the
                           DJI again reaches 16700.
 
                                                          The FED Is The Key Now.
|
                       There is just too much uncertainty that the Fed will start raising rates for the market
                       to move much higher and this is complicated by the next Jobs' Report coming
                       out of Friday.   What the FED has artificially created in the way of a long bull market
                       built on free money to big banks, it could quickly take away,  if the recent 13.5% DJI
                       decline is any indication. There are those who tell us the short term bonds show only
                       a 22% chance that September will bring a rate hike.
                       (See http://www.nytimes.com/2015/08/27/upshot/jobs-forecast-is-another-reason-for-the-fed-not-to-raise-rates.html?action=click&contentCollection=Economy&module=RelatedCoverage&region=Marginalia&pgtype=article )

                       I am not so sure the odds are not closer to 50%. I believe the meeting will be
                       quite contentious. The outspoken "hawks" and the "doves" are about equal in number.
                       Janet Yellen, the supposedly dovish Chairwoman, has been mysteriously quiet recently
                       and out of sight. She did not go to their annual Wyoming meeting to talk with the other
                       Fed Governors.   Has there been a rebellion against her?  Is she becoming more hawkish
                       so that she can remain in control.  She apparently sees herself as the
                       impartial chairwoman who states the "consensus" of views at the end of the
                       FOMC meeting.  She is cautious.  And a cautious person would probably
                       wait until the evidence is stronger and the opinions more conclusively in favor
                       of a rate hike.
                      
                       Still, only the New York FED Governor, Dudley, has spoken out recently
                       to advocate caution in the face of the extreme bear market in developing countries,
                       the Chinese market's meltdown, falling oil prices and falling commodity prices.
                       Several other Fed Governors are on record recently as favoring a rate hike soon,
                       despite the signs of world-wide Deflation and the economic downturns overseas. 

                       Once upon a time, I was interviewed by the CIA to be a Kremlinologist, one who
                       studied the divergent interests and pronouncements of the dozen or so members
                       of the Soviet Union's Presidium.  I think I still have an interest in the politics of
                       secretive power-elites.  So, today I made a list of all the FED members of the
                       Open Market Committee, those who will decide on September 17th, whether
                       to raise short-term rates and tried to find on the internet what exactly they had last
                       said on the subject.  Let me show you what I found.  The conclusion I draw from
                       this exercise is that there may well now be a majority for a rate hike, even though
                       a majority of the Open Market Committee are considered more dovish than hawkish.

                       I plan to keep this list of t he key Fed policy-makers handy.  I will try  to refer to it
                       each time one of these FED members makes a public statement.  We will want to
                       see how they may be shifting their position and their intra-committee alliances.
                     
                                               Members of Fed's Open Market Committee:
                                 (They decide "by consensus" whether to raise short-term rates.)

                        5 Doves: Dudley, Evans,  Rosengren, Brainard, Tarullo

                        3 Doves shifting in favor of a rate hike: Yellen, Williams, Lockhart

                        6 Hawks: Fischer, Lacker, Powell, Bullard, Mester, George

                      (  What is a hawk?  What is a dove?    https://en.wikipedia.org/wiki/Monetary_hawk_and_dove )
                             In 2013, Business Week made the same break-down that I am attempting here.
                                    http://www.businessinsider.com/the-2013-fomc-member-profiles-2013-1?op=1
                             Deutche Bank offered an assessment of the two camps within the Fed at the end of 2015.
                                    http://snbchf.com/monetary-fiscal-policy/fed-its-fomc-composition/

        
                                 ===============================================
                                                                                 Notes from last night.
                                 ===============================================

                                            Temporary Sharp Declines
                                         and Extreme Artificial Sell-Offs.

                        Looking at the Peerless charts for 1987, 1997, 2011 and 2010
                        show us that the odds favor a retest of the 16000.  Only the 1997
                        case would suggest that there will only  be a shallow one- or two-day
                        retreat. 
 
         1987 Crash (Caused by Reckless Computerized Trading in Index Options.)


 
                                                        1997 Parallel: 
             Only two very shallow retreats here before old high was challenged,



                                                  2010 Flash Crash
 

                      2011 Republican Shut-Down of Federal Government
                                 (Boehner says that this will not occur in 2015.)


 

                        From Wednesday night:

                                 Other Sharp DJI Declines to The 13.5%-Down Level

                        When one studies other DJI recoveries in the past after sharp declines
                        to the 13.5%-14% support- level below the bull market peak, we see that
                        the falling 21-day ma does act as resistance for a week before prices
                        penetrate it and resume their rally.  See the study here.
                              ../../MAXMIN/8-28-2015/big_declines_and_the_importance.htm

                        Look especially at the charts of 1941 (months before Pearl Harbor),
                        1950 (a month after North Korea invaded South Korea) and
                        in 1997.  Especially note the 1997 Panic.  It occurred because of a panic
                        in Asia with the DJI up very considerably over the prior 6 years. 
                        Computerized trading then also drove the decline down excessively.
                        Wikopedia writes:

                                "The October 27, 1997, mini-crash is the name of a global stock market crash
                                that was caused by an economic crisis in Asia. The point loss that the
                                Dow Jones Industrial Average suffered on this day still ranks as the eighth biggest
                                point loss and 15th biggest percentage loss since its creation in 1896. This crash is
                                considered a "mini-crash" because the percentage loss was relatively small compared
                                to some other notable crashes. But after the crash, the markets still remained positive
                                for 1997. "      (See October 27, 1997, mini-crash - Wikipedia)


        

            
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