Sep 7, 2010

Markets gave back some of last week’s gains on low volume and Euro rumors.

Short-term: 3 yellow, 1 red – still overbought and weakness likely
Intermediate-term: 1 green, 3 yellow – bounce still in effect
Stock targets: 37% swimming, 18% neutral, 45% sinking – still diverging

My indicators are as confused as I am about this market. The moves last week were more a pulling-back of bearishness rather than an increase in bullishness. Today’s was more a pulling-back of bullishness rather than an increase in bearishness. As the market treads over the same territory that it has all summer, the bull/bear scenarios are becoming more known — but it seems that fewer and fewer investors care about either scenario. It’s like the movie Groundhog Day. Well not really but I like the metaphor. Narrow trading ranges like this do not persist but it seems to me that something external is gonna have to break the range. It will likely do so by either forcing money into the market or forcing it out of the market.

Gold and silver are looking strong – and overbought in the short-term. As are some ADR’s and foreign ETF’s. As are the yen and Swiss franc. This is one weird boring market. What is strong looks good for the longer run as well — but it needs a pullback that actually lasts longer than a freaking HFT bid/ask price. And the correlation of everything to everything else has got to end soon.

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