Even The Aliens Are Bullish The Market

Even with the huge rally off the lows, none of the indices have yet to trade back over their 50-daily moving averages.

That means the market phases are Bearish.

Furthermore, only one of the Modern Family members is in a Recovery or Recuperation Phase.

Biotechnology IBB cleared the 50 DMA on Monday.

Not surprising that would be the first (and thus far only) MF sector to improve in phase.

Why?

The most heavily speculated area and often a reliable judge of public sentiment, IBB reflects the optimism that hit the market as of December 26th.

Yet, the public is usually late to the party, buying highs and selling lows.

When we look at Semiconductors, Retail, Transportation, Regional Banks and the Russell 2000, we see a strong bounce in a Bear market.

This is not an opinion. This is a fact.

Until the rest of the Modern Family clear and confirm into better phases, we continue to stalk for the end of this move up.

How will we know the rally is over?

First, let’s examine the fundamental factors.

The trade war-maybe a hopeful resolution around the corner-a big maybe.

Debt-not going away anytime soon. Not to mention that foreign countries have begun to lose their appetite for buying our debt.

The dollar-under pressure-ultimately, this is not a good scenario for the market.

The interest rates-yeah, thank the Federal Reserve for sharing their minutes and the dissension on the December raise. Nevertheless, we still seriously consider the historical low ratio between commodities and equities.

And, we still consider the metal rally as only the beginning or a sea change into hoarding raw materials, despite slowing global economic growth.

How does the Fed deal with that? They will have to raise should that occur.

The government shutdown-now in its 19th day.

Slowing economy-although the evidence has merely suggested this possibility, we are watching the fourth quarter earnings, unemployment numbers and GDP.

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