The minutes also revealed their concerned about weaker job growth in August, weaker retail sales growth, manufacturing production, surveys of business confidence, and a housing sector that remains "exceptionally weak."  

Again, all good for the interest rate picture.  Bonds didn't rally on the news because the Fed continues to be concerned with inflation as well.

You can see that the train continues to roll higher - staying right in that steep upward trading channel.  The PMO indicator is now at a one year high, and while this is a sign of momentum, you can't help but think we should see a pause in the near future.  Not a correction, just a pause to few percentage points pullback, perhaps as minor as a move back to the 20-day moving average.


                                 Chart provided courtesy of www.decisionpoint.com

Here is a sign that the bulls may be getting overly exuberant.  The graph below tells us that there is now more money in bullish Rydex mutual funds compared to in their money market plus bearish mutual funds, then since December of 2005. 


                                Chart provided courtesy of www.decisionpoint.com

That type of reading indicates that the market has had a good run, which we know, but it also means we could start seeing profit taking as there is less cash on hand to buy.

I have to admit that I probably would have already sought safety based on these readings, and the fact that the Sentiment Survey System is in the G-fund this week, but the EbbChart System made us some money by being in stocks early this week. 

Bottom line:  Stocks are due for a rest but you may want to wait for a sign that momentum is slowing.  The S&P is stretched well above the 20-day moving average and that could mean a temporary pause is imminent. 

That's all for today.  See you tomorrow.

Administrative Note:  I started an email alert list for the EbbChart System to let subscribers know that an interfund transfer is being done by the system.  Anyone can get on the list BUT no signals will be given in the email alert - just a link to the member's area so you know something has changed.  If you are not a subscriber it probably will not be of much use to you.
 

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