THE STOCK MARKET UPDATE

August 3, 2014

David H. Weis

Last weeks wide-open break in the S&P is either a major sign of weakness or another
in a line of shakeouts beginning from the 2011 low. The character and extent of the next
upwave should give us a better indication of how badly the market has been hit. When
compared to Thursdays sell-off, Fridays range contracted noticeably; however, the
volume was slightly larger. We can read this as an example of effort versus reward. It
implies the market attracted bargain hunting by those longs who have been repeatedly
rewarded for buying extreme weakness. A near-term bounce into the 1932 area is very
likely. A rebound into the 1942-1950 area would represent a 50% retracement of the
decline from 1985.

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dhw@weisonwyckoff.com

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