The S&P 500 started the week bearish…flashing the sell trigger, but quickly reversing to the upside. The bulls were simply too strong. After the weekly battle between the bulls and bears was called at Friday’s bell, the S&P 500 finished the week up .59%. I don’t think the bulls are out of the woods quite yet, they are still at resistance, but have a great opportunity to catapult the S&P 500 into all new highs.
The bear ‘o’ meter increased a little this week due to their being nothing out of the ordinary with market breadth. In order for the bear ‘o’ meter to decline, we would need to see either a breakdown of market action, deteriorating fundamental factors, and/or a signal in market breadth. Almost all are in a positive stature as of today.
Last week, we exited the Australia Index position. We still have one international position left. Frankly, not too hopeful on it, but it possibly made a double bottom at support last week. So, we will see if we can get some sort of ‘Teddy Turnaround’ in this area. The US sectors did well…a couple even making new highs which is exactly what we want to see. The commodities were pretty flat and uneventful. So, no other positions were changed or adjusted.
This week, we are looking to hold the current positions, adjust any stops up, or execute any stops on the downside if hit. The only stops close to being triggered are Treasuries and International. If in fact the S&P 500 bulls break the index to new highs, we want to see a HUGE jump in breadth to help convince the breakout…said another way…if the index breaks to new highs, we want to see a large number of stocks participate and not only a few.
This month’s book is “Self-Discipline: How to Develop the Mindset, Mental Toughness and Self-Discipline of a U.S. Navy Seal,” by Dominic Mann. It could be read in about an hour. This week should be exciting in the markets due to starting the week at resistance with a sell signal! Have a great week, we’ll be watching closely!
Adam Straseske, CMT
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