Today was another lackluster performance by the equity markets. This is the 2nd 100 point gain in the Dow that faded in the last week. It’s so tempting to want to buy when you turn on the television and we’re up 100 on the Dow and 30 on the Nasdaq. I’m as much an optimist as the next guy. But, I can’t ignore my signals and indicators that simply are not showing the makings of a new bull market. As I’ve stated many times, buying can start any day now. But, the more likely scenario is we get a washout with investors giving up on stocks. That’s what starts new bull markets that can last years. Sure, we’ll get trading rallies from time to time and we need to take advantage of those. But, right now, we don’t have the demand necessary to take us much higher. After analyzing today’s market internals, it looked to me that the sellers took a break today, not buyers leading the charge.
For now, the trade is still short U.S. stocks, long commodities, and some cash. I like technology as well.
