Review

Last week's call for a move up has played out nicely with kudos to the Nasdaq, oversold oscillators, Sat-Nept square and Mercury cycle for providing the clues.

It's now a week later though and things have changed, as is often the case.


CYCLES

The Saturn-Node square on October 8th is still the major forthcoming negative to my mind. I know these aspects don't always work in the way that I would like but I'll be quite surprised if this one doesn't have a major effect.

For what it's worth there also seems to be quite a few analysts calling for this current point in time to be a major high or turn:

• Cha on Hotcopper has been expecting for months to see a major turn on September 22nd.
• Raj has posted publicly that he expects September 23rd (+/- 1 day) to be a major high and a sharp decline to follow.
• Grinberg is expecting a "crash" soon but is publicly silent (as usual) in regards to the actual date.
• Ted Phillips is expecting a turn down from September 22nd to 27th. 
• Gann advises to watch the equinoxes and solstices for turns.

My cycle pivots posted back in August were: 

• Late Aug/Early Sept (potentially the Sept 12th Low)
• Mid Sept (potentially the 22nd/23rd high)
• Early to Mid Oct Low

If the above is true then markets are now heading down into an October low.

ASX

The XJO has now retraced more than 50% of the preceding decline and the SPI chart has retraced approximately 62% to 66%, depending on whether you're looking at the Spot or the December contract. My take away from this is that if the market is making a retracement then it has already gone far enough to qualify as such.

 My comments from the breadth charts are:

• New highs have been steadily increasing... positive
• New lows have been steadily decreasing... positive
• The VIX has dropped... neutral
• The Summation Index has turned up... positive

So the breadth has the odds in favour of upside but there are a couple of bearish interpretations as well:

• The amount of progress made by the breadth indicators has been relatively weak when compared to the price gain.
• Indicators at the low were oversold but that's all. To have more confidence in the rally I would prefer to have seen breadth divergence but that wasn't the case. So the oversold decline has bounced... Now what?

NYSE 

As mentioned above one of the major clues for the rise last week was the relative strength of the Nasdaq. This week it is gone (on a short term basis), but it hasn't reversed.

The Russell 2000 has continued its' relative strength. This is notable but the Russell is also sitting at a double top with potential momentum divergence so I don't want to be using it for a long bet at the moment.

Similar to the ASX, the NYMO and NYSI have turned positive however the relative strength of the move, especially for the Summation Index, is weak.

The cumulative NYAD still says higher but the level of new highs in the current move is a bit low.

Bullish Percent is also relatively weak.

SENTIMENT

The CNN sentiment index is close to neutral. This doesn't say much but I'm also noting that it was close to neutral at last year's May high.

NAAIM sentiment has risen again and is at 79... Just under the 80 benchmark for 'high' readings. Note that NAAIM collect their data on Wednesdays and the market continued to rise for the remainder of the week so the actual number is possibly a bit higher now.

Other points to note are:

• AAII sentiment has bearishness rising and bullishness falling, but is still basically neutral.
• RYDEX asset allocations are little changed and are contrarian bearish.
• The Equity Put/Call ratio is not extreme but is relatively low. Similarly the VIX has made a rapid drop back to 12 and seems to have more upside than downside potential.
• The FAGIX:VUSTX ratio tells a similar story to the Nasdaq and has quickly shifted from bullish to neutral or even slightly bearish.

SUMMARY

Given the above I'm inclined to think that a top is imminent for both the ASX and NYSE.

Cycles look negative, breadth summation is weak and sentiment is high. That's good enough for me to expect a move down from here.

As always the inmates are in charge of the asylum so anything is possible, including a new high. With the current setup the way it is though I just can't imagine it.

Good luck to all.