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The S&P 500 finished the short week up just a hair above 2%. The S&P 500 started the week on support and it held. This past week’s bar is an inside bar, which can be considered a buy signal given the context. To help strengthen the case for the bulls we have had three pushes down making a wedge reversal pattern. The bulls still have work to do, but they have some positive action to give them some hope.
Bull / Bear Market
The S&P 500 closed just a hair above the All-World (ex-USA) index giving the US markets the continued go ahead. Both indices are well above treasuries showing no change in the risk on stance according to 12-month momentum. When we look at another momentum indicator, we are getting some bear warning signals, but they have not signaled as of yet. So, the bear may be growling, but it certainly isn’t charging at the moment.
The swing indexes we like are the following: United Kingdom / Japan / Oil / Extended Treasury / Australia / Brazil / International Government Inflation-Protection Bonds / EAFE Value
Most of the indexes we pay close attention to were up this past week. Even Treasuries! The disappointing indexes were Oil and Australia. Australia was down just under a percent for the week where many other international indexes were up. Oil was right there…so close to breaking out to new highs, but it could not. We’ll see if Oil can hold in this range and make it to new highs this week.
We have two new swings we will take if we get the buy trigger. The first is the S&P 500 Value Index and the second is Global Natural Resources. Both are similar to many of the other markets in the fact they have had three pushes down, are on support, and have generated a buy signal. If we get the trigger…we’ll take it. We are still close and at least in the bottom third of the trading range so the context makes sense. With the remainder of the indexes, we are relatively far from many of the second purchase prices and stops with the exception of Treasuries. So, we will watch closely and take the appropriate actions.
The Education/Gratitude Book Club
This month’s book is “The War of Art: Break Through the Blocks and Win Your Inner Creative Battles” by Steven Pressfield. This is a great book…it is about getting up every single day and getting done what you intend to do regardless of how you feel. It’s been a while since I’ve read it…and seems appropriate at the time given we are starting the 2nd quarter.
Adam Straseske, CMT