I took a couple of weeks off from watching the stock market with
care in the hope there would be a moderate pullback that would
put the uptrend on a more reasonable trajectory. I pointed out
back on 4/27 that if the advance powered on, it would soon take
on SP 500 resistance at 930 - 935. It got close before pulling back
modestly (chart link below). However, the market has yet to break
below the powerful trajectory I set for it in the early going of the
rally, so the two week "holiday" I took netted little.
The market remains overbought. Most advisors are looking for a
pullback, and the debate whether the rally is a cruel bear advance
or a new cyclical bull has started to heat up. The sentiment
indicators I follow have moved from "too many bears" up toward
more nearly neutral levels. So, there is still a substantial dose of
skepticism out there. The latest wrinkle in all the talk is that big
rallies yield big corrections.
As of now, my indicators say it remains a heavily overbought
market, but one which remains in an uptrend. Moreover, nothing as
yet signals a top is in. So, I'll follow along. This rally has treated me
and other longs well even though I am on the sidelines for now.
When you have a powerful move like this, you keep your interest
level up even if you are not in it every day. Chart.
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