It's a short-term downtrend in a choppy market where a trend is difficult to define. I am a trend-trader, and in this type of market I like to step towards the sidelines. I'll be quick to sell, slow to buy.

My feeling is that there wasn't enough of a short-term correction in early March to launch a decent short-term uptrend, so that is at least partially responsible for the current weakness.

This chart below of the bullish percents shows that the NYSE BP is already below the level on March 11 when the uptrend started. A sure sign of broader weakness within the general market.

Also, the market is up against resistance, so its an obvious spot for the market to sputter.

Notice I didn't mention Mueller, or the inverted yield curve. I'm too overwhelmed by the abundant news stories on these two issues.

But I do think that the flailing trade talks may be an important factor in Friday's weakness. Of course, I really have no way to be sure and it doesn't really matter. Something upset the market, and that's all I need to know.

I almost forgot the net new highs, new lows. When these go negative, you are at risk for a substantial correction. I am bit worried by this, but one day isn't enough to be too concerned.

Here is an issue that I have been neglecting lately. Small caps have been underperforming, another hint that the next decline might be significant. Also, Friday's close was below short-term support.

The Longer-Term Outlook

Not all the news is bad. The ECRI Index is pointing higher.

It is below the zero-level where you have to expect the market to struggle, but above the negative-five-level where bear markets begin. Pointing higher in this fashion is encouraging.

The SPX-1500 has fallen below support, so the caution flag has been raised, but by just a notch.

Mike Burk has pointed out is his weekly column that the NASDAQ advance-decline shows a negative divergence. Not good, but we've all seen worse.

Junk Bonds are not indicating any stress.

Oil prices have been healthy which in this bull market is a net positive. Higher oil works against retail, but keeps oil-related loans solvent.

The Dow Theory chart is certainly flashing caution. The Industrials failed at their most recent buy-point, and the Transports appear to be in a downtrend.

Sector Strength

The sector alignment is definitely defensive. It has a very late stage look to it.

The Sectors are interesting. Money is crammed into the areas that you would expect to do well in a very weak but still growing economy.

I am a bit surprised, but encouraged to see retail showing some strength.

The rate-sensitive, and inflation-sensitive industries are slammed up against the far left.

Wow, this is a weak group. These stocks do not like this yield curve. So much for the all the pundits and professionals on CNBC telling us to buy banks.

The Gold Miners stocks have been on again, off again. I am believer that this group does its best when silver outperforms gold, and this chart is not encouraging.

Outlook Summary

The long-term outlook is cautious. Upgraded from negative Feb-2.

The medium-term trend is up as of Jan-4. 

The short-term trend is down as of Mar-22.

The medium-term trend for bond prices is up as of Nov-16 (prices higher yields lower). 
 

Investing Themes

Dividend-Payers
Technology
Health Care
Gold Miners
Brazil, Latin America, Russia

Strategy During a Bull Market:

• Buy large cap stocks and ETFs at the lows of the medium or short-term market trends.
• Buy small cap growth stocks on breaks to new highs in the early stages of market trends.
• Reduce buying when the market trend is at the top of the range.
• Take partial profits when the market uptrend starts to struggle at the highs.
• The cardinal rule is never invest based on personal politics. The stock market can do well regardless of which political party is in control.