EC Signs Of A Fake-Out Rally?

Back to the short-term trend, the number of new lows settled down on Friday, but it is still a bit too high, which means to me that the trend is not yet confirmed and it is too soon to be all in. The number of new lows on the Nasdaq should close well below the 50-level before the new uptrend is confirmed.

I'm including this chart to provide some perspective about how far the market has come from the election in early November of last year. It's quite the rally. I am hoping to continue to participate in the uptrend for as long as it lasts, and I am also hoping to be out when it falters. Additionally, I am not considering any purchase to be "long-term" with the market so extended, no matter how good the story or earnings in the stock.

Gold mining is the only industry that I track that is turning up off of the lows like this. Everything else that is turning up is off extended trends. I like the miners again, but I am also ready to be stopped out of any position that isn't working.

Outlook Summary

  • The short-term trend is up for stock prices as of May 14. This is where the change in trend began.
  • Contrarian sentiment is unfavorable for stock prices as of Nov. 14.
  • The economy is in expansion as of Sept. 19.
  • The medium-term trend for treasury bonds is down as of Oct. 10 (prices lower, yields higher).
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Disclaimer: I am not a registered investment adviser. My comments reflect my view of the market, and what I am doing with my accounts. The analysis is not a recommendation to buy, sell, ...

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