Markets Never Sleep But Models Still Favor The Bulls
It was a busy weekend, to say the least. Two birthday parties. Our youngest daughter's master's graduation at DU. The ensuing after-party until all hours. A celebration for our eldest daughter's Ph.D. Some precious babysitting time with our grandson. Four trips to the airport. And of course, a Father's Day gathering/barbecue where I got to say Happy Father's Day to my Dad in person, for a change!
The bottom line is I didn't make it to the keyboard much this weekend as my focus was on the various activities and the family members who made their way out west to join in all the festivities.
However, markets never sleep and since Ms. Market isn't concerned about flight delays, traffic, storms, and/or all the party preparations, it is important to get my weekly research done on time. So, without further ado, let's get the week started with a review of my favorite market models and indicators...
The State of My Favorite Big-Picture Market Models
I would prefer to see a couple more buy signals on the Primary Cycle board here. With one "sell" signals and two "holds" on the board, my take is the environment is constructive but not without risk. So, I'll continue to lean bullish during this sloppy, news-driven environment and will plan to use any emotional freak-outs as buying opportunities.
This week's mean percentage score of my 6 favorite models improved to 65.4% from 62.9% last week (Prior readings: 60%, 60%, 72.5%, 81.1%, 83.9%, 84.7%) while the median also upticked to 71.3% versus 68.8% last week (Prior readings: 62.5%, 62.5%, 80.0% 82.5%, 86.7%, 86.7%, 81.8%).
The State of the Fundamental Backdrop
There were no changes to the Fundamental Factors board this week. Although this board has virtually no value from a shorter-term timings/trading perspective, it is important to keep the overall fundamental backdrop in mind when plotting strategy. So, based on the readings here, I continue to believe the fundamental backdrop remains constructive and favors the bulls.
The State of the Trend
Stocks moved sideways last week. The good news is that there was some modest improvement on the trade war front. The bad news is there wasn't any real movement on the trade war front. So, with the S&P 500 back to within a stone's throw of all-time highs and the market now overbought from a short-term perspective, a pause that could potentially refresh makes sense here.
The State of Internal Momentum
The Momentum Board continues to look a little sloppy to me. The intermediate-term thrust indicators continue to flip-flop back and forth and are largely neutral. And the Volume Relationship models aren't exactly in gear here. However, with the market appearing to be in a consolidation mode, the current status of the board should probably be viewed as par for the course.
The State of the "Trade"
The Early Warning board remains in a largely neutral state. It is positive that our Sentiment Models continue to be positive, which suggests that traders became overly negative during the recent decline. But the bottom line is that neither team has the wind at their backs here from a near-term point of view.
Disclosure: At the time of publication, Mr. Moenning held long positions in the following securities mentioned: none - Note that positions may change at any time.
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