Good Monday - oops, I mean Tuesday morning, and welcome back to the game. As usual let's start the week with a review of the state of the market and our major market indicators/models.
The first step is a review of the price/trend of the market. Here's my current take on the state of the technical picture...
S&P 500 - Daily
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From a longer-term perspective (e.g. looking at a weekly chart of the S&P 500)...
S&P 500 - Weekly
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Next, let's look at the "state of the trend" from our indicator panel. These indicators are designed to give us a feel for the overall health of the current short- and intermediate-term trend models.
Now we turn to the momentum indicators...
Next up is the "early warning" board, which is designed to indicate when traders may start to "go the other way" for a trade.
Now let's move on to the market's "external factors" - the indicators designed to tell us the state of the big-picture market drivers including monetary conditions, the economy, inflation, and valuations.
Finally, let's review our favorite big-picture market models, which are designed to tell us which team is in control of the prevailing major trend.
The Takeaway...
Although stocks remain overbought and both sentiment and seasonality are not positive at the present time, the bottom line is the bears have been unable to get anything going (so far). And while I can easily argue that short-term traders may want to become/remain cautious here, longer-term investors ought to be ready, willing, and able to buy any dip that presents itself in the next month and a half. Remember, the low seen in October is historically the low for the ensuing quarters. So, if you find yourself underinvested or looking for a way to put cash to work, well, you know what to do...
We strive to identify the driving forces behind the market action on a daily basis. The thinking is that if we can both identify and understand why stocks are doing what they are doing on a short-term basis; we are not likely to be surprised/blind-sided by a big move. Listed below are what we believe to be the driving forces of the current market (Listed in order of importance).
1. The State of Global Central Bank Policies
2. The State of U.S. Economic Growth
3. The State of the U.S. Dollar
Go after your dream, no matter how unattainable others think it is. -Linda Mastandrea
Wishing you green screens and all the best for a great day,
David D. Moenning
Chief Investment Officer
Sowell Management Services
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The opinions and forecasts expressed herein are those of Mr. David Moenning and may not actually come to pass. Mr. Moenning's opinions and viewpoints regarding the future of the markets should not be construed as recommendations. The analysis and information in this report is for informational purposes only. No part of the material presented in this report is intended as an investment recommendation or investment advice. Neither the information nor any opinion expressed constitutes a solicitation to purchase or sell securities or any investment program.
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