View RSS Feed

Coolhand's Market Analysis

Bias Remains Higher

Rate this Entry
Last week, I said I was leaning bullish for the new week as downside pressure was not particularly worrisome. I also pointed out that breadth and liquidity remained bullish along with the smart money at NAAIM. For the week, the C and S funds were up moderately, but the I fund was down a bit.

DOW CHART-s-p-500-png

The S&P 500 rallied sharply last Monday to a fresh all-time high, but then reversed sharply on Tuesday with modestly dips again on Wednesday and Thursday. Friday saw the index bounce to end the week a bit higher overall. I don't need to draw trend lines to show the longer-term upward bias on this chart. The 50 dma is moving higher too.

DOW CHART-dwcpf-png

The DWCPF is biasing higher longer-term as well, but it's been more volatile with new all-time highs only occurring every 6-8 weeks or so. The 50 dma is moving higher on this chart too, but not quite at the trajectory of the S&P 500. If fresh highs remain as far apart as they have, we could be setting up for another downward move soon.
But let's set that off the side for now.

Breadth and liquidity remain bullish and those indicators are not to be taken lightly. NAAIM remains bullish too. Our TSP Talk sentiment survey came in more bullish, but is showing a neutral reading. My intermediate term system remains positive, but some of the signals are on the flat side. BPCOMPQ, however, is rising smartly.

What I see is a market that appears to be in some kind of transition, but as long as breadth and liquidity remain bullish, the bull market will stay alive. But that doesn't mean we can't get some degree of a correction along the way. I am wary of a correction coming at any time. I don't think it will be easily telegraphed. NAAIM sentiment may help give us a clue, so we'll need to keep an eye on them (as always).

For next week, I am neutral. With a recent all-time high tagged not too long ago on the DWCPF, I have to give some weight to a possible correction of 4-5% and maybe even more over the days or weeks ahead. I note that the BKX (Bank Index) has been weak of late, with price closing at its 50 dma on Friday. Is this an early warning? It's well away from its recent low in early June. By itself, it isn't saying much other than banks are not rallying in what is supposedly a rising rate environment (which I take with a grain of salt). I think it's okay to remain long in the C, S, or I funds as long as breadth, liquidity and NAAIM remain bullish.

Submit "Bias Remains Higher" to Digg Submit "Bias Remains Higher" to del.icio.us Submit "Bias Remains Higher" to StumbleUpon Submit "Bias Remains Higher" to Google

Updated 06-25-2017 at 09:30 AM by coolhand

Categories
Uncategorized

Comments


S&P500 (C Fund) (delayed)

(Stockcharts.com Real-time)
DWCPF (S Fund) (delayed)

(Stockcharts.com Real-time)
EFA (I Fund) (delayed)

(Stockcharts.com Real-time)
BND (F Fund) (delayed)

(Stockcharts.com Real-time)

Yahoo Finance Realtime TSP Fund Tracking Index Quotes