A new short-term uptrend began on Tuesday, Dec. 6. And on Friday, there was a white candle for the PMO index, which helps confirm the new uptrend. The major indexes look good, but I'm questioning the health of the uptrend based on some of the other charts that I like to look at.

The SPX closed above the 5-day average on Monday along with the Dow, so maybe you could claim the trend started Monday. However, I'm thinking the new trend started when the Nasdaq joined the others on Tuesday during a strong market session.

The bullish percents showed similar action on their charts, with the SPX bullish percent closing above the 5-day on Monday and the Nasdaq bullish percent on Tuesday. The bullish percents paused on both exchanges on Thursday and Friday, showing a bit of hesitation in the new market uptrend.

Let's give it a few days next week to see if that hesitation is a healthy pause after a few days of solid price increases, or if it is indicating that prices just temporarily bounced off lows before moving lower again.

The SPX equal-weight looks constructive, with the momentum indicator looking favorable. This chart also shows a late-week pause, but the pause looks a bit like a bullish flag. My guess is that this index will at least challenge its November highs.

Despite the decent-looking charts shown above, I'm skeptical about this short-term rally. In an uptrend, you want to see new lows drift lower to harmless levels. However, even though the number of new 52-week lows dropped way off Tuesday and Wednesday, there were way too many new 52-week lows on both exchanges Thursday and Friday. 172 new lows on the Nasdaq is far above harmless levels.

Advance/declines are off their lows but still weak-looking, and this is not inspiring in a new uptrend. While the major indexes look ready to challenge new price highs, the advance/decline lines are having trouble getting started. It is a negative divergence.

Another non-confirmation comes from the 10-day call/put ratio. Even though this ratio had moved lower since mid-November and looked ready to reverse higher, it didn't show a white candle despite a strong week for the majors.

Here is a look at the chart of one of the top small-cap growth funds. It is still pointing lower and it doesn't look like it is headed higher anytime soon. I can understand that small-cap growth might be underperforming considering Fed tightening, but this is weak for a market uptrend.

Bottom line: I'm disappointed. The major indexes look healthy and the uptrend looked quite good early in the week. But the market internals are disappointing and the number of new lows has turned negative.

I raised some cash on Friday to about 15%, and I am short small-caps via a 3x fund. Unless market internals improve next week, I'll continue to trim laggards and keep a healthy amount of cash.

Outlook Summary

• The short-term trend is up for stock prices as of Dec. 6.
• The economy is in expansion as of Sept. 19, 2020.
• The medium-term trend is up for treasury bond prices as of Dec. 4, 2021 (prices up, yields down).