A new short-term uptrend seems likely this week based on the price momentum indicator in the chart below.

The price momentum indicator in the chart above is in sync with the breadth indicator in the chart below.

On Friday, the number of new 52-week lows dropped way down to a level where the market can begin a rally that I am comfortable trading.

The ultra-sensitive package index held well above its 200-day which shows strength. Another good sign to go long short-term when the market gives the signal. I think the stocks in this index do well with lower rates

I'm watching this junk bond ETF every day because if the market is going to fall apart then junk bonds will too. But this is not the look of a chart that shows prices getting ready to roll over. Global markets are in turmoil, and the lowest credit US Corporate bonds are unfazed.

I looked back to see how this ETF behaved in the October-December period of last year, and it was slow to react to that sell-off but then fell apart. So maybe this isn't the best chart to use if I want an early signal of market stress, but so far this chart is a bullish divergence to the general stock market.

There was an endless discussion of the yield curve this week. To those who are skeptical of the yield curve, I will point out that industrial production has turned lower, and that this is also a good signal of trouble brewing for the economy and stocks.

Here is another picture of industrial production but with an overlay in red of the ValueLine Geometric Stock Market Index. It is a pretty good correlation.

Back to the yield curve. I include this to show that the 3-month/ 10-Year spread is not just a tiny difference.

Precious metals are looking poised for quite the breakout. I'm guessing it won't happen right away and that it needs to consolidate just a bit while stocks rally in the short-term. Just a guess.

I won't be completely out of the stock market until this ECRI index trades below -5%. And I see that the SPX 40-week average is still slightly above the 80-week average which is another indicator to be in stocks for now.

I have moved my accounts out of Technology for the most part. These leaders seem stretched and ready for a break. But I am having a hard time thinking of a group that can take their place. Most of the ETF charts have a similar look.

Maybe Health Care?

BioTech?

Outlook Summary

The long-term outlook is cautious as of May-18. 

The medium-term trend is down as of Aug-05. 
The short-term trend is down as of July19. (Probably close to a new short-term uptrend)

The medium-term trend for the price of bonds is up as of Nov-16 (prices higher, yields lower). 

Investing Themes:

Treasuries, Cash
Dividend Payers, Healthcare Innovators

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.
• The cardinal rule is never invest based on personal politics. The stock market can do well regardless of which political party is in control.