The Qs closed solidly below the low of the high month, June, on higher volume confirming the intermediate trend is down per the Monthly, Weekly, Daily System. The MACD was already on a Sell, and the Cabot Tides system may go to a Sell-Neutral status in one or two more days. We should expect that the support zone between the Jan/Feb highs and the May low will hold the decline, but a strong break below the lower trendline of the Andrew's Pitchfork may indicate that the bear market has returned in earnest.
I am still expecting that we will see another rally to complete the move off of the March low; however, the form of this correction will tell us whether that is the correct view. For now, I am holding short with the QID, TWM, DZZ, DTO and misc stock short positions. I am looking to add a position in the SKF, but not expecting a big move there.
I have been looking at the new wave of turn dates into August. If the support zone above does hold and we see a confirmed bottom in July, it appears that we may see another sharp pullback in August. This may be either a retest of the July low or a second or b wave pullback. Either way, for those who chose to go long after this correction, be prepared for a shake-out.
Recently I mentioned that AMGN may be getting ready to break out in a 3rd of a 3rd wave. After hours today, AMGN is up almost 14% on positive news about a drug trial confirming the 3rd of a 3rd hypothesis. I am holding this position for a minimum target of new all-time highs above 86.92. On the monthly chart AMGN appears to have completed a running flat correction at the April 08 low, which is a decidedly bullish pattern with targets projecting to the 130 to 170 range. The June lows are critical to this viewpoint and they should not be violated.
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