June 29, 2011

Short-term: 3 green, 1 yellow
Intermediate-term: 1 green, 3 yellow
Composite: Neutral and improving

For reasons that make no sense at all, the market is turning very positive. There is still resistance just above where we are and this could well be nothing more than a whipsaw and part of month/quarter end manipulation. But one of the reasons I started tracking these indicators was so that they could provide information about the actual market action that clashes with my preconceptions about what the market should be doing. And this is a perfect example of where it is doing just that. Breadth is still not particularly strong but if the market is going up from here breadth will follow. Stay in liquid stocks unless there is compelling value. But until the short-term indicators deteriorate, the market is likely going up.

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