The Short-Term Trend

Not much direction in today's market. The market looks a little tired, so I continue to be on watch for a new short-term downtrend.

The bullish percents showed the NYSE stocks to be a bit weak, while the Nasdaq stocks continued to show strength.

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The chart below isn't short-term, but let's take a quick look anyway.

If you believe, as I do, that we are in a trading range until the mid-term elections, then you have to consider that we are near the top of the range, at least in the short-term.

I'm sure you have seen this chart shown below with the horizontal support and resistance. Everyone is focused on it.

I have raised cash and I am resisting the urge to make any new purchases in part because we are at this resistance level. My best guess is that the market will soon make a move lower in order to retest the uptrend line, but I don't see much to indicate that the market won't find support at that level.

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Commodities, Currencies

What is this spreadsheet telling us?

The US Dollar continues to strengthen against foreign currencies. So, if you are investing in dollar-denominated ETFs, it means that you should focus on ETFs that hold US stocks.

Commodities are showing some strength which doesn't usually occur while the US Dollar is strong, so it is a judgment call whether you purchase the commodity-related stocks.

I am interested in watching the Precious Metals. Just like everyone else, I can't figure out what is going on with this group. More later.
 

I show this chart now and then just to show how closely linked the dollar-denominated, foreign-market ETFs are to their currency. CEW is an ETF representing a collection of emerging market currencies.

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In general, I think precious metals perform best when silver is outperforming gold, and, as you can see below, it looks like we've had a recent spike higher in this ratio. Something to consider if you are interested in the Gold Miner stocks.

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So far, the Gold Miner stocks are not responding.

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Outlook Summary:

The long-term outlook is cautious.  Higher rates are a head wind.
The medium-term trend is up as of May-10. 
The short-term trend is up as of May-7.On watch for the next short-term downtrend.

The medium-term trend for bond prices is down.