The Short-Term Trend
It’s a new short-term downtrend. The indexes closed under the 5-day while several market indicators are pointing lower. Plus, this short-term uptrend was 7-8 weeks old, and it is time for a rest.
New lows have picked up, but not too badly. Just enough to help confirm today’s weakness in the major indexes. Also, and this is important, the increase in new lows is at the top of the short-term cycle.
This is yesterday’s PMO index, and it was pointing lower to a degree that today’s selling was likely.
The Medium-Term Trend
The medium-term trend is still higher, but based on the chart below, I think the best time to buy stocks in the medium-term has past.
You have to decide for yourself what your trading strategy will be over the next few months, but I will most likely be reluctant to add to positions.
I will probably take some partial profits, and then sit back, wait, and do other stuff until market conditions start to look oversold again.
What other stuff? Well, the weather is beautiful in San Francisco, I live near the park, and it is bird migration season. Plus there are tennis courts here just waiting for me.
The Short-Term Leader List
The strongest ETFs are blue, the additional leaders are green and the weakest are red. The S&P 500 is the benchmark.
The market is frothy bullish, and this ETF is demonstrates it. Both the buying and selling has been high volume over the last few days.
I am watching this ETF because it is consolidating so nicely.
Outlook
The ECRI index was pointing to weak economic growth in the months ahead, but the index has now bottomed out and is pointing higher.
The long-term outlook is improving.
The medium-term trend is up. The best period for buying is past.
The short-term trend is down.
