“I Think I Can, I Think I Can”- The Little Train

Our last update was on the 13th of July. We asked, “Does the third quarter mean a new start to the year?” Well, it looks like we have a partial answer as we enter August. The S&P 500 rose 9.11% after dropping -8.39% in June. Year to date now the S&P 500 is down -13.34% after hitting a low of -23.07% on June 16th. One month does not mean the end of the year long misery but for now it means a break.

In our last Bias Indicator update on the major equity indexes the only period that had strength was the Daily (see July 13th Table). Now the weekly is in great shape as well as all U.S. Equity Indexes are above their weekly DMA Channels (see July 29th Table).

July 13th Table

July 29th Table

The trick in August is going to be getting the indexes into their monthly DMA Channel first and then above the channel. The SPDR S&P 500 via SPY will need to move above $429.52 during August to get into its channel. That may be a challenge but last month getting above the weekly DMA Channel seemed to be a challenge.