The Short-Term Uptrend Surprisingly Continues

The short-term uptrend continues, although I am quite surprised. I thought for sure that we were close to another downtrend on Wednesday, with an elevated number of new lows and a declining PMO index.

However, by mid-morning Thursday, the market was drifting upwards with improving market internals along with a number of leading stocks that were breaking higher. Thursday's session had a solid close followed by Friday's strong jobs report and a positive market response that gained strength for most of the day. 

Last Saturday I was quite bearish towards stocks short-term, but by mid-Friday morning, I felt that I had been proven wrong. So, on Friday, I had to scramble and rearrange my stock holdings to be positioned for higher prices in the short-term, and also to participate in higher prices among the market sectors that benefit when there is a strong jobs report.

Of course, I'm not happy about being wrong but I am happy that I have learned over time to recognize and admit to an error and act accordingly. It's a liberating feeling, and definitely beneficial for my trading account.

It will really be a kick in the head if the market decides to tilt bearish again next week, but I'm open to that possibility considering the fact that strong jobs implies higher rates sooner than expected. 

As mentioned above, the market was weakening on Wednesday with the Dow having a bad day, but by the end of the week, the indexes recovered and closed above their 5-day averages. I would have preferred to see a strong close similar to Thursday for the Nasdaq, but with the strong jobs report, we are probably seeing another shift away from Nasdaq stocks to the NYSE.

The SPX equal-weight broke out of its consolidation into new highs, although it did stumble a bit and it isn't yet convincing. Also, the momentum indicator has peaked, which means that even if the index continues to move higher, it will probably be a choppy advance.

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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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