Cautiously Higher Market...
The US market closed marginally higher again yesterday as it continues to climb CAUTIOUSLY higher.
Since last week, professional non participation and profit taking has been evident along with largely indisputable technical signals. Even though the market has been largely sideways so far, it has also been cautiously and gently still edging higher. I would have expected the market to be more sideways bearish inclined rather than bullish inclined at this point. The Nasdaq is also powering onwards higher and being typically the leader of the 3 major indices, I won't take this lightly.
That prompted me to look deeper to see if I actually missed anything.
Looking at bond yields, it is evidently still not behaving in a way that truly reflects a bullish stock market as it did not actually rise over the past few days like it should in a strong bull market. Looking at individual stocks, many of the stocks that I track actually closed lower over the past few days as well, unlike in truly bullish markets where these stocks usually close in the same direction of the market. (this is my personal basket of stocks I use for confirming the "inside story" of a market movement. when a market movement is due to just a few very strong stocks while the general market remains weak, these stocks would usually be weak as well)
However, on the other hand, even though I continue to see reasons to be cautious as this point, my Star Trading System continued to place us into new call options positions over the past few days instead of sitting us out and whenever my opinion and my Star Trading System's conflict, more than half the time my Star Trading System is correct.
All of these tells me that this is a very uncertain condition and one which warrants extreme caution. This is not the time to be fully committed to either direction. In fact, I cut my new call options positions fund commitment by half over the past few days as well.
For now, the market remains in a short term neutral trend within an intermediate and primary bull trend.
Since last week, professional non participation and profit taking has been evident along with largely indisputable technical signals. Even though the market has been largely sideways so far, it has also been cautiously and gently still edging higher. I would have expected the market to be more sideways bearish inclined rather than bullish inclined at this point. The Nasdaq is also powering onwards higher and being typically the leader of the 3 major indices, I won't take this lightly.
That prompted me to look deeper to see if I actually missed anything.
Looking at bond yields, it is evidently still not behaving in a way that truly reflects a bullish stock market as it did not actually rise over the past few days like it should in a strong bull market. Looking at individual stocks, many of the stocks that I track actually closed lower over the past few days as well, unlike in truly bullish markets where these stocks usually close in the same direction of the market. (this is my personal basket of stocks I use for confirming the "inside story" of a market movement. when a market movement is due to just a few very strong stocks while the general market remains weak, these stocks would usually be weak as well)
However, on the other hand, even though I continue to see reasons to be cautious as this point, my Star Trading System continued to place us into new call options positions over the past few days instead of sitting us out and whenever my opinion and my Star Trading System's conflict, more than half the time my Star Trading System is correct.
All of these tells me that this is a very uncertain condition and one which warrants extreme caution. This is not the time to be fully committed to either direction. In fact, I cut my new call options positions fund commitment by half over the past few days as well.
For now, the market remains in a short term neutral trend within an intermediate and primary bull trend.
posted by Jason Ng at 4:33 AM
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