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WALL STREET CRAPS STOCK MARKET OBSERVATIONS FOR JULY 12, 2014

July 12th, 2014

craps front coverSTOCK MARKET OBSERVATIONS FOR July 12, 2014: The stock market sold off after the most recent high that was posted just prior to the July 4th holiday. This selloff has moved all four of the key breadth oscillators to “oversold” readings. This indicates that the correction is over and that a short-term retest of the recent highs is in order. We’ll be looking for confirmation or non-confirmation of the retest in order to determine if this next rally will be the last one for this phase of the market. The Equity-Only Put/Call Ratio is also very close to issuing a “sell signal” after a long gradual decline into that reading. All of this adds up to a tricky retest of the old highs with a possible top in mid-July of major importance.

Key underlying market indicators show the following:

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My advice for traders and investors is expect a short-term rally up to the old highs that were registered on July 3rd. Some may want to play the upside here for a quick move up. But long-term funds should be held back just in case the retest of the old highs fails and a top of major importance is made in mid-July. This is next rally may be the time to exit most, if not all, of your equity positions.

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