The short-term trend continues higher although it is weak and listless in most areas of the market ... with the exception of the mega large-cap stocks. The PMO index is having trouble moving up to the top of its range similar to the short-term peak in March. My guess is that we are getting close to the top in this short-term cycle. I'm worried about giving back the profits earned this year so I have already started raising cash.

The number of new 52-week lows perked up a bit on the NASDAQ, but the total is still comfortably below a level of concern. However, I'm suspicious about this market so I'm going to keep an eye on this because I don't like to see an increase in new lows while the PMO is rising and near the top of its range. 

The bullish percents have leveled off for the NYSE and NASDAQ, but the SPX continues to rise although it is now into a very overbought range. This chart makes me think that the short-term trend is looking like it is close to a top.

This is a chart of just the NYSE bullish percent with a basic momentum indicator. Momentum is nearing a peak, and I see that the number of stocks with a bull trend has been slightly lower with each peak showing a slight and gradual deterioration in market participation.

Does this chart show US Dollar strength or weakening? The larger downtrend line was broken in March but is the index building a base to move higher or is it getting ready to push towards new lows again? I'm not sure.

This chart is looking bullish and I'm wading into these stocks as they break above their 50-day lines. I'll be stopped out if they close below the 50-day. I'm going to let the gold miner stocks stop me out if I'm wrong and the group isn't ready to move higher.

The producer price index continues to rise at a rapid rate as shown by this chart below. Someone on TV mentioned that the current weakness of high-PE stocks isn't due to higher 10Y yields, but due to rising inflation pressures. I ask, is that the same thing? And does it matter? I'm thinking that they are two different things and that a rising 10Y yield is something that stocks can handle, but rising inflation pressure is something that stocks cannot handle. Interesting question but a good example of overthinking. 

At the moment, I'm less focused on making money than I am on protecting profits, so my accounts have a healthy amount of cash. More later.

Outlook Summary

The short-term trend is up for stock prices as of March 25.

Contrarian sentiment is unfavorable for stock prices as of Nov, 14.

The economy is in expansion as of Sept. 19.

The medium-term trend for treasury bonds is down as of Oct.10 (prices lower, yields higher). 

Strategy During a Bull Market

• Buy large-cap stocks and ETFs at the lows of the medium or short-term market trends
• Buy small-cap growth stocks on breaks to new highs in the early stages of market trends
• Reduce buying when the market trend is at the top of the range
• Take partial profits when the market uptrend starts to struggle at the highs