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Take a look at this beautiful chart. Thursday's wild selling barely shows up as a blip. As long as these two major indexes coil their way to new highs in a price pattern above the 21-day EMA, we have no choice but to own the leading stocks in these indexes. 

However, the two indexes shown above don't represent the market. These are the two indexes that represent the majority of stocks, and finally, we have a very nice short-term buy signal.

The PMO index in the top panel of this chart has been rising for quite some time, but it was out of sync with the indicator in the lower panel. Now, finally, they are in sync but with the PMO already at the top of its range, which is where I start to get cautious towards stocks short-term. 

However, as you can see from the November-December period, the PMO can remain at the top of its range for a number of weeks. It is a very solid-looking buy signal in the lower panel.

The bullish percents of the two major exchanges are suddenly looking extremely bullish.

Junk bonds are surging. This is a bullish indicator for stocks and bonds.

The Summations are pointing decisively higher.

New 52-week lows have been at harmless levels for two days. I like to see the NYSE new lows well below the 50 level, and I like to see the Nasdaq new lows below the 75 level or so.

So, where does this leave us? A new short-term uptrend began just this past week, which is usually the signal to be an aggressive buyer. But at the same time, the PMO index (second chart) is at the top of its range, which is a signal to be less aggressive with new purchases. To resolve this, perhaps I'd be a cautious buyer on pullbacks of the large-cap leaders, and also a careful buyer of smaller-cap industrials that are showing strength.

Bottom Line

At the moment, my accounts are fully invested. The stocks I own are mostly technology, but I did add industrials on Thursday and Friday. Because I own technology, my accounts took a painful hit on Thursday, but I'm still holding because there wasn't serious technical damage such as breaks below key moving averages.

Meanwhile, the weekly chart of the equal-weighted SPX is looking quite good. This is a bullish indicator.

This chart represents the longer-term trend of the market, and it is giving the green light to own stocks at the moment.

This is an awesome price pattern setup. If this index pops to a new high, it could really take off much higher. This is another bullish indicator.

This chart looks really good, too. It is getting close to new highs.

The price of oil is critical to a bull market. We want this price to remain healthy, indicating a strong economy, but not too hot, which would fuel inflation.

Last week, I was worried that these two leading industries were trending lower. Now, they have come back forcefully. This is a bullish indicator.

Emerging markets look quite good at this point, and they could have a lot of room to run higher.

Defense stocks are still looking like they have stalled, but the financials are breaking higher.

I'm not a buyer of this ETF. I'm not sure I would buy an ETF with 2000 stocks. But it is generally accepted that when small-caps are rallying higher, it is a very good sign for the general market.

It is a bull market until these ETFs break down below their trend lines. This is another bullish indicator.

Outlook Summary

• The short-term trend is up for stock prices as of July 10.
• The ECRI Weekly Leading Index points to economic recovery as of July of 2023.
• The medium-term trend is UP for Treasury bond prices as of Feb. 1 (yields down, prices up).

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