Coolhand's Market Analysis

A positive open at the start of trading today was a welcome sign that maybe a low has been put in and the market is resuming its advance, but some mysterious weakness in early afternoon trade forced the major averages to their support levels before another reversal took hold that helped the broader market close with modest gains.

So nothing's changed. The market is technically still on sound footing even though sentiment remains uncomfortably bullish and bouts of internal pressure continue.

Yesterday I had reported that the Seven Sentinels issued an "unconfirmed" sell signal, which technically keeps the system on a buy. I should point out that the current buy signal went unconfirmed for about 2 weeks last month before getting confirmation even though the market continued higher from the initial signal. What that "may" mean is that yesterday's sell signal was a marker or warning for an eventual downturn if not an outright correction. It may take more time before a confirmation signal happens. That's just a scenario however. This market could decide to move sideways with an upward bias for some time too. Or it could finally decide to begin the next up leg in earnest.

Earnings season will hit the market hard next week and those overall results could be the catalyst that propels this market higher, or serve as a selling point given bullish sentiment. European concerns will also continue to hang over the global market as they have for some time now. Debt auctions are continuing and any hint of fear could also put additional pressure on stocks in general.

But this wall of worry is what's been keeping this market afloat too. And the trend remains up until it isn't.

The charts were improved today and actually appear a bit more bullish, although there's a little bit of room for concern. Let's take a look:



NAMO flipped back to a buy today, but notice the downward slope of the overall signal points since about mid-December. Lower highs are currently being put in on the Nasdaq, which could be another hint of trouble ahead. NYMO has moved in more of a sideways pattern and remains on a sell.



NAHL and NYHL look good and are flashing buys.



TRIN is on a buy, while TRINQ remains on a sell.



This is what really helps give the Sentinels an overall bullish stance. BPCOMPQ made a good move higher today and appears to be getting ready for another advance.

So while I still have an unconfirmed sell signal from yesterday, the system technically remains on a buy.

I did move 50% of my I fund position into cash today, simply to reduce my own personal risk. The other 50% I spread out between C, S, and I. I decided to take both sides of the trade for now.