The S&P500 elected a Daily Bullish Reversal last week and a rally unfolded thereafter. But we see this as posturing just yet. The volatility will begin with the first week in September and then rise into November.
This market does not appear to be in crash mode – only a correction mode buying time. The directional change last week turned the market back up. However, we have another next week and the week of 09/01 seem to be shaping up as a high with a turn back down thereafter. So some caution is in justified. A high need not be new highs. It may be only a retest of the July high or a double top.
Corporate cash is at record highs so this market is by no means over-priced. We will still see a Phase Transition unfold. The question is timing. Once we get past this October/November people, we should see a trend form. It is possible that mixing this entire situation of a Sovereign Debt Crisis and the War Cycle we may see an extended rally into the 2016-2017 time frame and government crashes. If the markets peak in 2015 and fall back for 2 years into 2017, then it looks to be off and running into 2024.
The mixture of the Sovereign Debt Crisis and the War Cycle are the key to the future. We will try to do an update in September with a on-line session via a live-stream since that worked well the last time.