The Short-Term Trend

The short-term uptrend continues. I'm watching carefully for signs that the market is ready for its next short-term downtrend, but the indicators are holding up. 

I continue to believe that the market is retracing higher within a larger downtrend, but I have learned to mistrust what I believe and to trust the indicators. So, for now, with the indicators pointed higher, my accounts are long and positioned with the expectation of higher prices to come.

I took partial profits way too early, which means I am underperforming the true believers in this market. But, that happens sometimes, and I'll just need to do better in the next uptrend.

Most stocks have participated in this rally, at least to the extent that they are now above their 50-day averages. However, the NASDAQ is now at a level where profit-taking has occurred in the past.

Investor's Business Daily has counted only one distribution day in the last 25 days. I count two, but it doesn't really matter. Clearly, there isn't any selling pressure in this market at the moment. At least, not that you see by counting distribution days.

The NYSE Summation Index continues to point higher. If you look closely at the white bars within the uptrend, there have been a number of days in which it looked like this index might start to roll over. But, with each period of weakness, buyers have stepped in.

The number of new 52-week lows is cooperating very nicely with the bulls. Mike Burk likes to say that nothing really bad ever happens to the major indexes without an elevated number of new 52-week lows.

The usually reliable ten-day Call/Put ratio has pointed lower a couple of times, but then it has quickly reversed higher.

Outlook Summary

I do my best trading when I am patient and disciplined. The economy is in recession as of March 28. The short-term trend is up as of March 24. 

Contrarian Sentiment favors lower prices as of May 2. The medium-term trend for Treasury bonds is up as of January 25 (prices higher, yields lower).