This chart of the SPX is looking very good. SPX prices are hitting new highs while emerging out of a bullish symmetrical triangle base. At the same time, the number of new lows remains harmless. Bullish

As you would expect, when the SPX moves to new highs, the PMO indicator will move towards the top of its range. This chart is telling me that, although the market is showing strength, the best time to buy has passed. Any new purchases should be made with added caution while the PMO is at this level.

The chart below shows the number of NYSE new 52-week highs at healthy levels, and the number of NYSE new 52-week lows at harmless levels. It is telling us that the market internals are strong and favor owning stocks.

You may have noticed that I have included fewer charts related to the short-term market trend. That is because stocks are not all moving in sync, and instead, there is a considerable amount of rotation from one sector to another. So, by necessity, I am de-emphasizing the short-term trend in my trading.

At the moment, I am about 95% invested, and I am starting to look more at opportunities to trim than for opportunities to buy.

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Another chart telling us to keep our accounts in stocks. This is my longer-term market indicator, and it looks positive.

There seems to be a lot of excitement about stock prices, and the excitement is based at least in part on the expectations of lower rates. But usually the rates set by the Federal Reserve follow the 2-year Treasury yield, as shown below. However, at the moment, the 2Y and Fed Funds are at just about the same level. I think this chart suggests that maybe there could be one or two rate cuts, but not much more than that. 

Here is another chart suggesting that there won't be a lot of cuts in Fed Funds. Commodity prices are breaking out, which argues for rate increases, not cuts.

Not everyone agrees with my assessment of the future for rate cuts. The builders are very rate sensitive, and they both broke out nicely on Friday. These are good-looking charts.

The German stock market also broke out from an awesome, very bullish-looking consolidation base. Bullish

Here is another bullish breakout. This chart suggests that the general market is strong in most sectors and industries, and not just technology.

Not everything is breaking out. This is one of the former leading areas of the market, but it has pulled back nicely to its uptrend. This presents an opportunity as long as buyers operate their trading strategy using strong stop prices.

I was skeptical of the rotation into small caps, but this chart is certainly now convincing. This is a really good-looking breakout accompanied by a turn higher in relative strength. Bullish

Dow Theorists will like this chart showing the Industrials and Transports confirming the bull market.

Technology has actually lagged this market lately, although the setup is very bullish looking in my opinion. And the Semiconductors are already leading the way higher.  Bullish

In case you were thinking that only US stocks were heading higher, this chart is a reminder that the whole world is making money in stocks right now. It does look extended, though.

Outlook Summary

As of Jan. 5, the short-term trend was UP for stock prices.

The medium-term trend was Neutral for Treasury bond prices. 

More By This Author:

A Mixed Market To Start The Year
Market Concerns Despite The Uptrend
New All-Time Highs In A Short-Term Uptrend