Further to my post of June 29th, I thought I'd show where the Dow 30, S&P 500, Nasdaq 100, and Russell 2000 Indices are currently trading in their 2012 Q3 timeframe relative to the prior quarters. In that post, I mentioned that if the Q3 candle retested the Q1 lows again, I'd be very skeptical of much of a convincing advance above this year's high during these three months.

As can be seen on the updated Quarterly charts below, the current Q3 candle did, indeed pullback, but hasn't quite retreated to the Q2 lows, although the Nasdaq came close. Instead, an "inside" candle has formed, with price near the top on the Dow, S&P, and Nasdaq. The Russell is the laggard in roughly the middle.

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Further to my last weekly market update, this week's update will look at the Major Indices and Major Sectors to assess strength vs. weakness in these groups during the past week.

The Weekly chartgrid below of the YM, ES, NQ and TF shows that price has been locked in a tight upward-sloping trading range from their June lows, with market action see-sawing back and forth each week.

This is the first week since that time that all four E-mini Futures Indices have closed above the mid-Bollinger Band (for today's exercise, I'll refer to this point as their "mean" on the Weekly timeframe). All four closed near their weekly high.

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The 2012 Olympic Games will open this Friday in London, England. This news article mentions a cost to the British taxpayer of more than nine billion pounds, with a hoped-for return of 13 billion pounds over four years (as suggested by Prime Minister David Cameron). This seems like a pretty big gamble "at a time when Britons are struggling with a double-dip recession, rising unemployment and severe public spending cuts."

Data released on Wednesday shows that Britain's GDP dropped further into negative territory at levels seen in mid-2009, as shown on the graph below.

The Daily chart below of London's FTSE Index shows market action as at Tuesday's close of 5499.23. Major support lies at 5500, at the moment, and market action from mid-2011 is, basically, in a large trading range, defined by a triangle…in fact, this range extends back to 2009-2010 and is forming a large diamond pattern…potentially a topping pattern with a 1300 point range.

A drop and hold below this diamond could very well send London's equity index tumbling, possibly by 1300 points from 5500 down to the 4200 level, or lower…one to watch, along with future GDP data releases, as well as Libor fallout, over the coming weeks.

Further to my post of July 17th, once again, Oil finds itself testing rising channel support on the Weekly chart below. At the moment, it's trading in between the 50 sma (red) and the 200 sma (pink) in an attempt to break out of this range either to the upside or the downside. Its recent rally didn't quite make it all the way up to the "mean" (mid-Bollinger Band).

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