The Market Is Sending Mixed Signals

The number of new 52-week lows on the NYSE is elevated. It isn’t what you want to see if you are expecting the market to push stock prices higher.

On the other hand, it looks like we are getting a Dow Theory bull confirmation.

The market is sending mixed signals. What to do? You have to decide for yourself because I have no special insights into this market. But in my accounts, I have more cash than usual, and a few short positions. However, I am also keeping my “longs” in the areas of the market that continue to do well.

The Leader List

The story today is the number of ETFs pushing up towards new highs such as Financials, Industrials, India, Mexico, Home Construction, Defense, Transports, Momentum (MTUM), Dow Industrials.

That is an impressive list for a market that has been under pressure.

This is a nice breakout for the home builders. It isn’t ripping higher. Instead, it is a nice gradual advance which is more my style.

This is a monthly chart for Silver. It doesn’t look good for the precious metals. I’m a seller.

The daily chart of EEM, and it is hanging in there. The sideways movement is either a dome top forming, or a new base building in advance of a break out. As long as the 20-day is above the 50-day, maybe it is best to assume it is building a new base.

PPH looks good to me despite the recent sell off. These are steady but slow growing companies. Maybe buying this group of stocks on the pullback is a better strategy than waiting for the breakout?

Outlook

The long-term outlook is positive.

The medium-term trend is down.

The short-term trend is down.