OK, where are we at technically? We are finding a near-term high from the low right after July 4. You’ll remember that as the rally where the Transports took off giving us a Dow Theory confirmation signal. On Monday, July 3 the Dow made a new marginal high while Transports just made a new high.
We are in the 89-day window on many charts from that low. Markets took the opportunity to gap down as we see here on the intraday SPX. On a 15 min, it’s very close to a perfect square out at 64 bars down at 2566. What we are looking at now is how they handle the test of the gap. Seasonally we are at a point after the rally where there should be consolidation at the very least to a shake of the trees. Like spoiled watermelon that is suddenly out of season, a serious correction shouldn’t happen now and if it is going to happen likely gets postponed until the New Year.
But in addition to taxes, the black swan is suddenly back on the table. In the past week, we’ve seen domestic turbulence is a fact of life. One time its Las Vegas, then it’s a church shooting, who knows what will be next? Right now, there is a purge of the globalist Wahhabi faction going on in Saudi Arabia. It’s a lot bigger than the media is reporting. The Saudis have a blockade of Yemen after the Houthi rebels fired a missile over Riyadh which has the fingerprints of Iran all over it. Last Friday Dr. Pieczenik, the real-life Jack Ryan, who has been recently hacked to keep him from reporting important revelations got a chance to speak anyway. He predicted there will be a shooting war between the Israeli army and the Lebanese army which has merged with Hezbollah. The sudden resignation of Lebanese Prime Minister Saad Hariri seemed shocking given he said the reason was to protect the country from imminent danger. It was thought he was under house arrest in Saudi Arabia but late Sunday he claimed he was a free man and would return home within days.