This is supposed to be a seasonally bullish period. From the end of quarter window dressing through the July 4 holiday the stock market tilts to the bullish side; not always or every year but generally speaking. Why the markets are open on July 4 is another story, but consider the first and last hour without the midday doldrums.

As I look at my Dow chart, the early action on Friday came in much as expected, but the action faded late and they left an upper tail. Traders seem to have gotten out of bed on the wrong side. The low from last week is in the 61-day window off the Dow bottom back in April. We should get a halfway decent reaction.

But like everything else we’ve seen its very questionable. We are now two weeks out from the next big-time window and after that we enter a period where anything can happen. This year, anything can happen. However, up to this point, my new Kairos 2.0 square root indicators for the HGX, CAC and FTSE forewarned of the market problems to this point. I can also throw in the Transports which left a big upper tail on Friday.

I’m not concerned about this week, a strange week given the holiday falls right in the middle. Some people make a long weekend out of the first part of the week while others start their holiday on Wednesday. We could have low volume all week. It’s next week where problems could start.

Before I go on to other issues, the Greenback and precious metals are at key inflection points. There are enough readings embedded in these charts to change the direction. To be fair, the readings are not as good as the Kairos 2.0 calculations we discussed above but enough to respect a change. On Friday it looked like it would happen as the Greenback put in an evening star but the bears still didn’t get the upper hand as the action only glanced below the low of the last green bar on June 27.

Look at this picture very carefully. Yes, it’s an evening star. But an effective evening star has the red bar closing below the low of the green bar. That shows the change of power with the bears gaining the upper hand. As you can see, it did not happen. Today we have a green bar working which almost negates this potential reversal signal. Gold has something similar. With the bulls hanging on to the Greenback, if for whatever reason tomorrow turns out to be a red bar that covers today’s action, it would flip back because the bulls would’ve given it a great shot but failed. The only caveat is tomorrow is likely to be a light volume day.

Why are we talking about this? Simply put, it’s the most interesting and noteworthy action on the board right now. Getting back to the stock market, if this is a seasonally bullish sequence, what hand will bulls be dealt once they no longer have the wind at their back at all? Markets have been incredibly resilient this decade and they could pull a rabbit out of the hat again but odds are against it. Look at the recent history of the 200-day moving average. They grazed in April, briefly dipped below it in May. Now they’ve closed below it and today is the third day under water. We haven’t seen this kind of action in a long time. We must go back to Brexit to see the Dow below the 200 and what was only for a day. The last time the Dow was below the 200 was the correction which led to the bottom in February 2016. As you know, we are now coming to day 610 from the market’s overall February bottom of that year. Officially that window hits a week from Thursday.

Right now, we have a stock market where we could easily lose housing and transportation sectors. The stock market will not sustain a bull leg without participation from those areas. Looking ahead, I don’t like what I see when it comes to social mood. Since we last spoke, Kennedy retired from the Supreme Court and once again, the rhetoric is heating up. This is not normal political discourse and I’m very concerned about it. I’m not going to be the boy who cried ‘wolf’ but I think many Americans are looking at this boorish behavior in disbelief.