VIX had an inside week, after challenging mid-Cycle resistance a third time in three months. It closed above Short-term support at 10.60 and is on an aggressive buy signal. Once above the upper trendline of the Ending Diagonal formation, it has the distinct probability of reaching the August 2015 high at 53.29. In other words, a complete retracement is possible.   

(CNBC)  It shouldn’t be too surprising that the XIV exchange-traded note, which is designed to deliver the inverse performance of the well-known CBOE Volatility Index (or the VIX) on a daily basis, is attracting fresh attention after surging as much as 87 percent this year. 

But some caution that investing in the exchange-traded product now could be deeply risky.

SPX tests Short-term support

SPX challenged the Weekly Short-term support at 2417.86, closing just above it for a flat week. This may be the start of a decline that completely retraces the rally from the February 2016 low. This also puts the SPX in danger of violating the 5-year trendline at 2100.00.

(CNBC)  U.S. stocks closed higher on Friday on the back of stronger-than-expected employment data.

The Dow Jones industrial average rose 94.30 points to close at 21,414.34, with McDonald’s contributing the most gains. The 30-stock index briefly traded more than 100 points higher. The S&P 500 rose 0.6 percent to 2,42518, with information technology leading advancers. The Nasdaq composite outperformed, advancing 1.04 percent to 6,153.08.

The U.S. economy added 222,000 jobs in June, the Labor Department said. Economists polled by Reuters expected an increase of 179,000. The unemployment rate ticked higher to 4.4 percent from 4.3 percent. Wage growth — which is viewed as a measure of inflation — rose by just 0.2 percent, however.

  NDX challenges Intermediate-term support

NDX challenged Intermediate-term support at 5599.45, but closed above it. NDX is on a confirmed sell signal.  There is expected to be about two weeks of decline ahead. It’s time to take necessary precautions against a significant breakdown.  

(RealInvestmentAdvice)  Over the years, I have regularly addressed the psychological and emotional pitfalls which ultimately lead individual investors to poor outcomes. The internet is regularly littered with a stream of articles promoting the ideas of “dollar cost averaging,” “buy and hold” investing, and “passive indexing” as the solution to achieving your financial dreams.

However, as I addressed in the “Illusion Of Declining Debt To Income,” if this was truly the case, then why is the majority of Americans so financially poor?

But here are some stats from a recent Motley Fool survey:

“Imagine how the 50th percentile of those ages 35 – 44 has a household net worth of just $35,000 – and that figure includes everything they own, any equity in their homes, and their retirement savings to boot.

That’s sad considering those ages 35 and older have had probably been out in the workforce for at least ten years at this point.

High Yield Bond Index declines beneath support

The High Yield Bond Index declined beneath Intermediate-term support at 165.91, closing beneath it. The sell signal has been reinstated beneath that support level. The Cycles Model suggests weakness may continue on a timetable similar to that of equities.  

(MarketWatch)  Conventional Wall Street wisdom says higher interest rates eventually hurt stocks. But in the current environment, it will be a dramatic change in equities that hits rates, say some analysts.

Skittishness among stock investors of late, those who have been rotating out of high-flying technology shares, prompted pundits on Wall Street to declare that central bank hawkishness is behind such angst.

Bank of America Merrill Lynch economists in a note from Friday said that higher rates over the next six months will be negative for stocks and high-yield bonds. Very simply, when bonds lose favor their prices fall, sending their yields, essentially a term for market-set interest rates, higher. That raises borrowing costs for the companies that make up the stock market.

USB falls beneath Intermediate-term support

The Long Bond extended its pullback beneath Intermediate-term support at 152.62. This may be a sucker’s play, as the Cyclical trend is up. The rally has quite a distance to go, since it must complete the right shoulder near 165.00 before plunging through the neckline near 146.50.