Today’s topic is very simple: Strength in Pause — the power of consolidation.
In earlier notes, we mentioned that the Jackson Hole meeting might act as a trigger for a market reversal. The current move has confirmed that idea.
Why consolidation means strength, not weakness
On the S&P chart, the market has reversed and returned to prior highs.
Some worry about negative divergence. TCS believes that divergence has already been fixed. As we said before, divergence is not permanent. It can correct itself in later moves.
Who played the role of “rescuer”? The answer is clear: small and mid caps (Russell 2000).
The candle on August 12 was key. It changed the market’s inner structure.
If you only watch SPX or NQ swings, fear may mislead you. But if you look at internal momentum, you will see that strength is building. So far, everything is still on the right track.
AAPL: lesson from a time-symmetric flag
• From August 4 to August 13, AAPL rose for 8 days.
• From August 14, it paused for 8 days.
• This symmetry suggests the flag pattern is almost done.
More important: AAPL only pulled back one-quarter of the pole. This is a High Flag, usually very strong. From this, a fair target is about 240.
TLT (20-year bond ETF) also shows time symmetry. But it pulled back one-half, so it is a standard flag, not a high one. Still, once the flag finishes, it also points to a target of about one pole length higher. The outlook is positive.
Review of other setups
• Tesla (TSLA): textbook break–retest–support/resistance flip.
• Uber (UBER): pulled back to value zone.
• Palantir (PLTR): higher lows and highs, may rebound to 180–185.
• LRCX: like TSLA, breakout then pullback, momentum could drive another leg up.
These are not only stock cases but also pattern study material. Worth printing, noting, and using to build trading intuition and execution.
Market depth check
TCS depth data shows: about 61% of stocks are within 5% of their one-month high.
True overbought usually comes later, when this ratio climbs higher.
For now, market depth is still healthy and supports the bullish view.
Key conclusion
• The market is not weak. It is in a healthy consolidation.
• Consolidation is not stagnation. It is digestion and preparation.
• It is the prelude to the next upward move.
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