According to my risk summation system, the days this week with the highest risk of a turn in or acceleration of the current trend are Monday August 23rd, Wednesday the 25th and Friday the 27th. Given the current trend is up, today the DJIA should put in a top of some sort or have a big acceleration up. My lame excuse for tagging 60% of the days this week as having potential for a turn is that there is quite a bit of dispersion in the data this week, so I am stretching to even make a call.
If you're keeping score, last week's Tuesday risk window did see a turn down leading to a loss of 900 DOW points from Monday's close on the high, but the turn down only lasted a couple of days. The only way that last week's Friday risk window can redeem itself is if the DJIA turns down today making Friday a lower top. Otherwise it will be a dud since the low last week occurred on Thursday.
As anyone who reads my posts knows, I'm a sucker for symmetry. The daily DJIA plot below shows the intersection of internal falling trend lines drawn through pivots/gaps and a rising major trend line under recent important lows. Turns are tagged by these intersections as shown by the vertical red bars. Notice this week's Friday August 27th risk window is the next intersection.
Speaking of risk windows, the whole world just passed through a big one this past week. Nowadays what passes for peace and tranquillity is largely based on the belief that the US has its allies backs. That confidence evaporated faster than Lake Mead this past week which probably has emboldened all sorts of unsavory global characters. If a market top is forming, FED tapering will probably get the blame, but it seems that there's plenty to go around. Of course, maybe this just recharges the wall of worry as can be seen in the plunging sentiment figures. I definitely know that it's going to take one serious abattoir to make this bull into steaks.
Regards,
Douglas
