Not too many people care about the short-term trend at the moment.
The bigger concern is the larger trend of the general market where there is a notable negative divergence between the healthy looking Nasdaq and Small Caps indexes, and the poorly performing blue chip stocks and their indexes.
The Dow Industrials Index just dipped under its 200-day, so that means both the Industrials and the NYSE Index are trading under their key technical trends.
In addition, the global index is also under its 200-day.
And the Transports Index is challenging its 200-day.
This negative divergence isn’t enough to indicate the end of the bull market, but I do think it is enough that we need to sit up straight and take notice.
I get the sense that not many people who follow the market are concerned about this. Maybe people think that any day now there will be a series of positive headlines that push these back up again.
Who knows, maybe they are right, but I am thinking that it is better to be prepared for more prices to the downside than it is to be positioned to take advantage of an upside price surprise.
Rates
What is this spreadsheet telling us?
The leader is still Inflation-Protected Corporate bonds reflecting the late-cycle whiff of inflation from higher oil prices (in my opinion).
Most of these ETFs are skewed left, and, in general, we want to only own ETFs that skew right. So, income producing ETFs are not the best place to put money at the moment, unless you have a long-term investment outlook in which case you probably wouldn’t bother even looking at this spreadsheet.
The non-stock portion of my accounts is currently in T-Bills (BIL) because it is the easiest and safest place to have money while the Fed is busy raising rates.
Note to self: You have to be patient and disciplined, but you also have to be decisive and ready to jump in when the opportunity is presented.
