The relative strength of Commodities and Currencies favors higher stock prices.

The Short and Medium-Term Trends

The short-term uptrend is doing well, and I believe a new medium-term uptrend has started. Breadth indicators continue to support the uptrend. New highs are starting to look healthy, and new lows are at harmless levels.

The Bullish Percents are ticking higher nicely.

The BuyWrite Indexes are pointing upwards, and the Dow and SPX BuyWrite Indexes are touching 50-day new highs.

I believe that a new medium-term uptrend has started. More about the medium-term tomorrow.

Commodities, Currencies

Below is the spreadsheet I use to help track the relative strength of the various areas of the general market. Blue is a shift higher, and red is a shift lower.

All of the ETF relative strength shifts were lower. I think it is because the relative strength scores of ETFs that hold stocks has gone up quite a bit over the last two weeks which pushes down on the RS scores on the ETFs below.

In general, I think that when the RS scores of the currency ETF decline like this, it is generally a positive sign for stocks around the globe.

The strength in Energy is also a good sign for global markets, although I am aware that the price of oil currently includes a premium due to global tensions.

Bottom Line: this spreadsheet is generally good news and favors higher stock prices.

I should add that the number of investing themes has increased nicely over the last two weeks. Software, energy and small caps have been added to the leader list based on the categories of ETFs hitting new 52-week highs.

Emerging Markets have dramatically fallen off the list due to recent US Dollar strength, but also due to very scary signs of inflation and defaults, particularly for Venezuela and Argentina.

Outlook Summary:

• The market is looking really good right now, but I am nervous about the impact on stocks of the 10Y and 30Y Treasury yields which are both poised to break into new highs.
• I am also nervous about the headlines swirling around the White House. The news keeps getting worse, and it just seems like a matter of time before one of these headlines gets close to the man at the top. I worry what the impact will be on the stock market if this happens.
• The long-term outlook is cautious.
• The medium-term trend is up as of Apr-10. 
• The short-term trend is up as of Apr-7. 
• The medium-term trend for bond prices is down.

Investing Themes:

• Software
• Medical Products
• Oil, Gas
• Wind, Solar
• Cyber Security
• Payment Processors
• Small and Micro Caps

Strategy:

• Buy large cap stocks and ETFs at lows of the medium or short-term trend.
• Buy small cap growth stocks on break outs to new highs during the early stages of short-term up trends.
• Stop buying when the short-term trend is at the top of the range.
• Take partial profits when the uptrend starts to struggle at the highs.
• Never invest based on personal politics.