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Coolhand's Market Analysis

Averages End Mixed for the Week

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Last week, I said I was neutral as the indicators were beginning to hint at toppy behavior. I thought we might be in for some sideways movement with some degree of volatility. The week ended up mixed, so my expectation was reasonably on target. I said that while we were due a deeper correction, pin-pointing when that happens and from what level is difficult to ascertain. The main obstacles for the bears to my eye were, and still are, bullish readings on NAAIM, breadth and liquidity.

The week was not without some market changes to keep on eye on. In particular, the transport sector got slammed last Thursday and saw only a modest bounce on Friday. That is not a bullish sign, so I'll be watching how transports fare over the days/weeks ahead.

ELECTION POLL AT NBC - ME GO TO G FUND-s-p-500-png

The S&P 500 gave up more ground on Friday, but did not test Thursday's intraday low. Momentum continues to weaken as is RSI.

ELECTION POLL AT NBC - ME GO TO G FUND-dwcpf-png

The DWCPF also lost more ground on Friday and came very close to testing Thursday's low. Momentum is falling along with RSI.

So, the two charts above are looking dicey, but they remain bullish in the intermediate and longer-term. Breadth and liquidity remain bullish. I found it interesting that breadth remains just a hair from all-time highs despite recent market weakness. That makes for a treacherous path for the bears.

NAAIM remains bullish. Our TSP Talk survey is neutral, but still has plenty of bulls in the poll. The options look neutral heading into Monday.

The market is showing mixed signals, but the signals that count are bullish. I have to remain neutral under the circumstance as I do not have any short-term conviction on the direction of the market at this time. However, the bulls continue to have the advantage in spite of any short-term weakness or sideways action.

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S&P 500 (C Fund)
S&P 500 INDEX,RTH (^GSPC)
DWCPF (S Fund)
Dow Jones U.S. Completion Total Stock Market Index (^DWCPF)
EFA (I Fund)
iShares MSCI EAFE Index (EFA)
AGG (F Fund)
iShares Lehman Aggregate Bond (AGG)
Source: https://finance.google.com/finance