Coolhand's Market Analysis

Just like yesterday, the market gapped down at the open, and just like yesterday the dip buyers stepped in to drive prices back up. But unlike yesterday the retrace didn't fare as well as the market ended the day with moderate losses.

The Sentinels have been forecasting an Intermediate Term decline since mid-November, and in a normal market I'd expect a decline to last more than 2 or 3 weeks, but the market has not been kind to bears over much of the past 2+ years and today's action may be foretelling a similar story as played out on September 1st of this year.

Let's look at the charts and I'll explain:



NAMO and NYMO, while treading in negative territory for some time now, have been suggesting the market is consolidating since the 15th of November low. I had mentioned this recently, but was not ready to see it as a bullish sign. They are both on a sell at the moment.



NAHL and NYHL also appear to be tracking sideways and up the past couple of weeks or so. They too are on a sell today.



TRIN is on a buy, while TRINQ remains on a sell. This is a mixed signal and appears neutral overall.



Here's where it gets interesting. BPCOMPQ actually moved up a bit today. Yes, it's still on a sell, but it made a bullish move to the upside. That gets my attention.

So 6 of 7 signals are still flashing sells, while TRIN remains the lone buy. This keeps the system on a sell.

We had a similar set-up at the end of August just before the market exploded higher on September 1st. Keep in mind, I am not saying we're about to explode higher, only that the set-up is very similar and that I need to be vigilant about a possible reversal to the upside. The fact that our Sentiment survey is on a buy is also a factor.

If you go to my account talk thread on the message board, you can read what Don (the developer of the Seven Sentinels) thinks about today's action in a link I posted this evening.

I sold my 15% F fund holding this morning and bought 15% each C and S funds as a possible short or long term play depending on how the action plays out. The other 70% I'm keeping in G just in case the decline isn't over. The I fund I'm avoiding all together given the strength in the dollar.