Last week’s Market Update – Showtime! – announced that the time had come for a sell-off in equities and we were not disappointed as the Dow lost over 234 points (worst week since March). Internal indicators now point to a pause in the decline. It’s now time for a short Intermission.

One of those indicators is the total number of unchanged issues divided by the total number of issues traded(NYSE). Itreached a low on Thursday indicating a low in equities.

A 21-week cycle low is due the week of August 21 (solar eclipse!). Unless equities reach the 38.2% retracement of the 2016 rally near 2,220 by then, I doubt that will be the end of the decline. Rather, it will likely be the beginning of an intermediate bounce in a bigger seasonal decline.

Try a "sneak-peek " this month at Seattle Technical Advisors.com

Ed Carlson, author of George Lindsay and the Art of Technical Analysis, and his new book, George Lindsay's An Aid to Timing is an independent trader, consultant, and Chartered Market Technician (CMT) based in Seattle. Carlson manages the website Seattle Technical Advisors.com, where he publishes daily and weekly commentary. He spent twenty years as a stockbroker and holds an M.B.A. from Wichita State University.

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