Editor's Note: The following analysis was offered earlier via Scott Reamer's technical service. We share this vibe with educational intentions only. For more information regarding Scott's unique approach, please click here.
Last week we suggested that the rally off of the London bombings would likely need to consolidate before possibly moving to the higher levels we projected in the SPX (1237-1247) and DOW (10,700 +/-).
Well, since July 14th, the markets have largely moved sideways, with significant overlapping action and divergences at the recent SPX and DOW peaks (which was in our original target areas).
This action presents two potential paths from current prices according to our models: either the peaks in the last several sessions were peaks from which a solid decline (possibly 2-3%) will ensue, or this sideways consolidation is in fact the "correction" that we were looking for last week and one more spike to the upper parts of our original targets is in store.
This is not intended as advice, but we continue to look for a sustained and important peak in prices for stocks nearby; none of the action in the last week in prices, technicals, or our models have changed that conclusion.
Prices could spike up toward SPX 1247 and 10,750 +/- or so in the next several sessions without changing either the short term or intermediate term bearish potential here.
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