Image Source: Pixabay

There was quite a bit of buying into the broader market this past week, as shown by the upward tick of the PMO index below. This doesn't convince me to be a buyer, however, because I think the better buy signal will probably be when the A/D momentum indicator bottoms out and turns upwards. 

There was endless discussion late in the week about some selling among the leading stocks, as everyone is looking for signs that the hottest stocks are topping out and ready to pull back in price. The selling did push the two leading indexes down a bit and a pause in the price advance is certainly coming, but it isn't very convincing yet, at least not when looking at this chart.

The bullish percents are still pointing lower. I'm certainly not seeing signs of a new short-term uptrend in this chart.

I won't spend more time on the short-term trend. I'll deploy my available cash back into stocks when the market sets up to rally, but I may take advantage of individual opportunities, as well.

Regarding my longer-term holdings, I continue to hold -- but nervously so. As I've mentioned a few times recently, the longer-term trend is higher for the indexes as long as these two ETFs remain above their uptrend lines. This may be the only chart we need for a while.

The rate-sensitive industries have continued to move sideways. My guess is that these two ETFs are setting up for another significant move higher, but that is only a guess, of course.

I have no way of actually knowing, but they made big moves since November, and they probably just need time to consolidate and form a base before moving higher again. One thing I do know for sure is that these two ETFs are worth watching to see which way they break.

This ETF had a very nice pop this past week.

Software is finally starting to look interesting. I like the look of this chart.

I'm sorry that I don't have more to offer this week.

Outlook Summary

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

More By This Author:

Leading Stocks Push To New Highs Despite Short-Term Downtrend
Start Of A New Downtrend? Unsure
The Short-Term Uptrend Is On The Ropes