The battle between the bulls and the bears is intensifying as we enter the new quarter. Today’s action was generally positive manner despite the small downward move in the DJIA and S&P 500. Technology led the way and breadth in the QQQQ’s was 61 gainers to 39 decliners and finished the day as the only major index in the green.

 We are finding some long side opportunities today, however our caution levels remain high and we’ll look to hit the eject button quickly should stocks begin to turn. Our goal is capital preservation and in a ‘prove me’ market our time frames remain short.

We continue to face new headwinds as today’s ISM Index report, which measures corporate purchasing, was sharply higher at 59.4 versus consensus of 52 and a prior reading of 53.6. While this number looks positive in the wake of the devastating hurricanes, it is also indicative of a robust economy and will most likely bolster the probability of further rate hikes.

The SP-500, a broad measure of the overall market, closed very close, but above its 50 day moving average. The technical picture is damaged but continues to improve. Time will tell if the recent strength, in the wake of all our economic challenges, is Mr. Market flashing his resiliency, or over optimistic investors refusing to deal with the harsh realities of what’s to come. We don’t know how it will play out but we will be prepared to move quickly once the picture clarifies.

TSP members who have been keeping that powder dry will know very soon whether it will be time to redeploy or continue on the side lines.

Have a good evening.

RevShark