The short-term uptrend that started Oct-13 continues to move higher, and the PMO index remains near the top of its range. With the PMO [price momentum oscillator] at this level and the short-term trend having lasted a number of weeks, it is time to be taking some defensive measures such as raising cash by cutting losers and taking partial profits.

(I'm traveling so I need to keep my comments brief.)

The market just keeps stair-stepping upwards and the bullish percents show the stair-stepping pattern of the market quite well. There isn't much to indicate in this chart that the trend will turn lower anytime soon.

Junk bonds have been a friend of the bulls since early October, and despite the choppy uptrend, this ETF now looks like it is breaking above its downtrend line. It is a bit early though to declare a break in trend.

A lot of people are watching the VIX and they are all assuming that a dip under the 20-level is bearish for stocks. Maybe there are too many people convinced of the same thing? So far the low level of the VIX isn't undermining the market's uptrend, but while it is under 20 or so, the VIX is indicating it's time for short-term caution.

The SPX has moved up to its downtrend line, and this is where you have to watch carefully for signs of market weakness.

Bottom Line: Nothing has changed much in my accounts from last week. I have one large short position and a couple small short positions. I also have a number of small long positions in the companies with the best earnings and chart patterns, but with the PMO at the top of its range, I won't be adding to the longs. 

I don't have any special insights into the market at the moment other than to say that I think it makes sense to keep to the basic game plan and to raise cash into this market strength in order to reduce the pain of the next short-term market decline and to have cash available to buy when the time is right.

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During Friday's session, while trading below their 50-day averages, Treasury bond yields broke down below short-term support and seem to be headed lower still. 

Outlook Summary

The short-term trend is up for stock prices as of Oct-13

The economy is at risk of recession as of Mar-2022

The medium-term trend is higher for treasury bond prices as of Nov-19

Strategy 

• Deploy cash by adding to stock holdings while the market is near its short-term cycle lows.
• Raise cash with partial sales of stock holdings while the market is near its short-term cycle highs.

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