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WALL STREET CRAPS STOCK MARKET OBSERVATIONS FOR AUGUST 2, 2014

August 2nd, 2014 Comments off

craps front coverSTOCK MARKET OBSERVATIONS FOR August 2, 2014: The stock market experienced a broad correction last week that took most oscillators to deep “oversold” readings. We could be just one day away from a good bounce right here. But at the same time, there is the danger of going into a “flash crash” sometime in the next couple of weeks. While a small amount can be risked for a sharp short-term bounce, I am more inclined to let the market run its course to the downside with a better bounce off the 200-day moving averages of the major indices. That would require 200 more points to the downside in the Dow Jones Industrial Average.

Key underlying market indicators show the following:

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My advice for traders and investors is be on the lookout for a “flash crash” scenario in the next couple of weeks. We may get a golden opportunity to buy soon if you’re out of the market now and in cash. But the market could experience sharp swings in either direction. My guess is that August 2014 will be the month of an important trading bottom.

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