Market Clues

If you're trading this stock market, your trailing sell stop order was likely executed Monday morning, taking profits on autopilot. It was a good run while it lasted. The selloff came as a surprise for the last trading day of the month. The broad market advances 70% of the time on the last trading day of the month, but Monday was in the 30% category.

This market has had a pattern of taking two steps up and one step back. In that light Monday's quick decline fits the pattern. Our short term systems quickly switched back to buy signals before the close of trading Monday. Although there is that monthly tendency for the market to rally during the first part of the month, the selloff Monday could be part of a larger leg down, so caution is well-warranted here.

The selloff didn't hurt our Model Portfolio. It gained slightly on the day and now stands up 9.65% at the one-month mark.

For longer term holders, we don't see any real warning signs that the market has topped yet. In fact, recent weakness has been greeted as buying opportunities. That hasn't changed. And, this has taken place without the leadership of the tech stocks. A quick look at the Accumulation-Distribution Charts at http://www.marketclues.net/img/d2/ will quickly reveal that many of the high-tech sector indices had been in steep dives until recently. This indicates strong insider sales and a warning that the sector has not turned around yet. However, you will also notice that many of these sectors' accumulation-distribution curves have flattened out and are beginning to base. This indicates to us that the high tech sectors will be leading the market higher in the future.

The Semiconductor Index (SOX) likely holds the key to just when high tech will make its return. Its Accumulation-Distribution Curve is showing a strong pattern:

And, the overhead resistance line in SOX's price chart shows signs of bending -- Monday's session saw the index close lower, but not before that line was nudged higher:

A turn up in tech may be within a month or two of happening. Stay tuned.

A Market Clues subscription is still the best bargain around at just 30¢ per day. We don't know how long we can continue to offer the service at this ridiculously low rate, so if you haven't signed up for a paid membership, do so today! Other services charge much more for much less information. One service is switching from $240/year to $480/year on March 1. Another service is going from free to $250/year. We think our information would still be a buy at $1000/year, but we have tried to price it so that the average investor can afford it. But, it seems that, in this business, a high subscription price makes the service more attractive, so we're considering a big hike in price in the near future.

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posted by Bob Carver  # 9:36 PM

After the short term (trading) buy signal Thursday, we were glad to see follow-thru Friday. The Dow added 0.86% to Thursday's gains, but that wasn't the best news. The broad market Value Line rose 1.19%, Russell 2000 1.57%, Small Caps 1.59% and Semiconductors 2.2% (ending just below the resistance line we showed on Thursday). Although the NYSE Composite finished up barely more than 1%, it was enough for a brand-new, all-time high record close. The sign of a truly strong index is its ability to hold up during the selling squalls, then quietly move to a record high without attracting much attention from the crowd. The NYSE Composite is turning out to be a real leading index now.

We hit the headwinds earlier in the week as the market sold off hard, but our Model Portfolio came through the storm in great shape. It's now up 9.25% and it will only be a month old on Monday.

It looks like our old friend, the Monthly Buying Spree, may be back in town this week. This is the period of time starting on the day before the last trading day of the month and ending on the third trading day of the next month. Traditionally, new money for investment in the stock market comes in during this period of time and it often is put to work buying stocks. So far, so good as the rally has gotten off to a great start.

What's ahead? Things look good to go for the coming week, at least for the bulls. There are a few markets with danger signals flashing, however, and we discuss them, as well as many markets with more positive outlook in this weekend's Detailed Comments for subscribers (including free trial subscribers, of course).

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posted by Bob Carver  # 10:59 PM

The stock market rallied Thursday after an absence of selling pressure abruptly turned a dull and boring session into a strong rally day. We expected volatility in both directions, but only got it on the upside. That's a very bullish sign of strength.

Traders following our short term trading indicator (VLE-DJ) found it turning bullish at midafternoon on Thursday after being on a sell signal from Thursday of last week.

One of the sectors we think is preparing for a breakout is the Semiconductors. The chart of SOX shows gathering strength just below resistance:

Our Model Portfolio continues to gain steadily and is now up 7.54% since we restarted it just about one month ago. Designed to be a slow but steady grower, it has certainly lived up to expectations so far. Note that it is designed to produce long term gains as distinguished from our short term indicators.

This weekend, we'll go into detail about several markets, including Oil, US Dollar and Foreign Currencies, Silver, Gold, Mining Stocks, Grains, Bonds, Stocks and Stock Market Indices, Canadian Stock Market, Australian Dollar and Stock Market and the London FTSE-100 Index.

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posted by Bob Carver  # 10:50 PM

Some emailed to say they had a hard time finding the short term trading signals we mentioned yesterday. Those signals are on the Trading Page, which has a link in the main page. To make it easier to find, we have added a link to that page in the Quick Links section at the top of the page.

The link is "For Traders Only" because it's for those who are nimble traders only. The VLE-DJ indicator signals are shown midway in the right column on the Trading Page. That small window automatically refreshes itself every minute during the trading day. The value of the spread shown is a link to the chart -- if you click on it, it will open the chart in a new window.

Others said they couldn't find the link to the Model Portfolio. So, we added a more prominent link to that page also. The Model Portfolio is for investors only. This is basically a portfolio for the long term, not for traders at all.

Speaking of the Model Portfolio, it has been weathering these headwinds in good shape. At the close Wednesday, it showed a gain of 7.18% since we started it just about one month ago.

Apparently, the big sellers on Tuesday spent the night celebrating and slept in Wednesday. However, we don't think we've seen the last of them just yet. The wave pattern begs for more decline here. And, we haven't seen the kind of panic to buy puts amongst option players that would indicate a bottom just yet. However, the 24th is a Time Ratio turning point from two different measurements, one saying it should be a low and the other saying it should be a high, so we could not only see a short term reversal of trend on Thursday of some significance, we could see volatility in both directions.

Dow 10,611 is the 50% retracement level for the previous rally and the market found solid support there Wednesday. But, the lower Bollinger Band at 10,400 is likely to be tested before this correction is finished.

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posted by Bob Carver  # 5:43 PM

This downleg is unfolding in a fast and furious way, suggesting it will play itself out relatively quickly. This is the second shoe dropping after the first shoe dropped just after the New Year began.

Yesterday, we mentioned that our Model Portfolio would be hitting some headwinds this week in the form of a declining market. So far, it's been no problem as the Model Portfolio actually continued to rise Tuesday despite the down market. That portfolio is now up 7.09% on the year.

This illustrates a couple of points:

1. A diversified long term portfolio can sometimes weather the storm pretty well;
2. A short term trading position can buffer the overall portfolio by hedging against market declines.

As for the rest of the week, we expect volatility to continue high as we go into the next trading low. The 39-week exponential moving average now seems a likely target for the correction. Right now, the SPX's 39-week moving average is at 1151. Our wave count shows this decline to be a very probable wave C down in an A-B-C correction which started at the early 2005 high. The A-wave ended at 1163.75, so look for that low to be broken, accompanied by panic selling and a very low $-weighted call-put ratio for the OEX. That will be the signal to get ready to do some buying, of course.

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posted by Bob Carver  # 6:21 PM

Many US markets were closed Monday observing a minor government holiday.

We restarted our Model Portfolio last month and it's off to a good start, up 6.59% to date. Of a total of twenty stocks in the portfolio, only three are showing paper losses. Our five biggest gainers are ahead 22.33%, 22.32%, 15.02%, 14.47% and 14.23% -- all as of the close Friday.

This week will present a challenge, however. We've had the wind at our back, but it has shifted and we're going to be hitting a headwind that could last into next week by some measures. The S&P 500 Index could retest January lows, although that's probably a worst-case scenario. In any case, a test of the 55-day moving average is very likely to occur.

World markets were generally quiet on Monday. A slide into the end of month is likely for many, which should setup a very good buying opportunity.

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posted by Bob Carver  # 9:10 PM

Last week we got confirmation that the Bond Bubble had popped with rising long term interest rates the new direction. The Producer Price Index registered a 10% annualized gain last month, suggesting that inflation may be the primary force motivating the Federal Reserve. That's a change in psychology we've been waiting months to happen in the bond market. Up until the end of January, the bond market had been buoyed by assumptions that:

1. Inflation was well under control. In fact, many bond participants believed that deflation was still a present danger.
2. The economy was slowing rapidly and destined to enter a recession.
3. Foreign central bankers were inevitably going to loan money to the US government to finance whatever deficits the government wished to run.

While short term interest rates have almost trebled since the bottom of the last recession, long term rates have remained stubbornly low, causing an extended run of mortgage refinancing and overinvestment in real estate. That is going to come to a screeching halt very soon now that long term rates are following short term ones to the upside.

Despite the common feeling among investors, rising interest rates are not always bad for stock prices. And, of course, investors can profit from rising interest rates by investing in a reverse bond fund, such as RisingRates.com, which closed up 1.3% as the long bond fell 1.0% in price yesterday. We discuss this topic, as well as many markets, in this weekend's Detailed Comments . . . .

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posted by Bob Carver  # 4:38 PM

The larger trend still is pointed up. One of the weakest sectors last year was the NASDAQ-100 Index (NDX), but recent action in the sector suggests that may be slowly becoming the sector of choice in the second half of 2005:

We'll discuss the longer term prospects for the market in this weekend's update.

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posted by Bob Carver  # 11:01 PM

Alan Greenspan spoke to Congress Wednesday and said, in part,

"For the moment, the broadly unanticipated behavior of world bond markets remains a conundrum. Bond price movements may be a short-term aberration, but it will be some time before we are able to better judge the forces underlying recent experience."

Greenspan was speaking of the fact that long term bonds have been rising in price in the face of falling short term bond prices. Looked at in the interest rate dimension, long term bond rates have fallen while the Fed has almost tripled short term interest rates. Most expected the long bond rate to rise, sending bond prices tumbling. To those who honor the wisdom of the bond market, this has been a sign that the recovery was in trouble. However, Greenspan doesn't agree:

"All told, the economy seems to have entered 2005 expanding at a reasonably good pace, with inflation and inflation expectations well-anchored."

The bond market sold off on those comments, indicating it is close to changing its collective "mind" about those assumptions it has made about the economy. And, we have very significant turn dates coming up which suggest that although bond rates could decline just a bit more, time is running out on this bond bull market. We suspect bond rates will be climbing before too much longer. We have additional comments (for subscribers only) on our Daily Chart Comments page. See TLT in particular.

The Fed upped its growth estimates for the US economy. They now look for a 2005 growth rate of 3¾-4% with an inflation rate of 1½-1¾%.

The stock market took the news well, with the leading sectors gaining. However, interest-sensitive issues declined. This skewed the breadth figures to nearly neutral.

Although we suspected our ace indicator, the VLE-DJ, would issue a short term sell signal (a sign of a short term pullback within a longer term bull trend) on Wednesday, it actually continued on the short term buy signal it gave early Friday morning. However, the market probably is going to pull back at some point here in order to setup the next leg up. We remain fully invested on a long term basis, but wouldn't be averse to some short term hedging against a pullback if a sell signal is generated.

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posted by Bob Carver  # 5:37 PM

Our best intraday trading indicator, the VLE-DJ Spread (which we use to help trade the Russell 2000 emini futures), after its last buy signal Friday morning, has flirted a couple of times with sell signals, the first time midafternoon on Monday and again at midafternoon on Tuesday. Late buying has pulled it up from that sell point into the close on both days. We suspect, though, that it won't be long at all before that trading indicator will flip into sell mode for a dip back toward the January lows in the stock market. Now, this is a trading indicator and we remain bullish and fully invested in the stock market from an investment perspective, but are looking to hedge with a short term bearish position in our trading accounts for an expected dive in the stock market into the month-end period. We always use trailing stop loss orders to protect our capital in our trading accounts, of course, as everyone should.

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posted by Bob Carver  # 9:33 PM

One market which has been a Guiding Light for the US stock market has been London's Financial-Times 100 Index (FTSE-100). The accumulation-distribution curve turned skyward a few weeks ago and hasn't shown any divergence so far. And, prices have unfolded in a very powerful Elliott Wave 3 pattern.

However, after powerful wave 3's come consolidative wave 4's. And, the slackening volume and resistance directly overhead suggests we're very close to that point now:

If London does go into a wave 4 consolidation, the US markets are sure to follow.

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posted by Bob Carver  # 6:03 PM

We hope you're enjoying Free Week at Elliott Wave International. It's always great to get an alternate interpretation (although, their current bullish stance on the stock market and gold stocks in particular certainly agrees with our own current views -- but our wavecounts differ substantially on the longer term time horizon!), especially when it's absolutely free! If you haven't signed up yet, do so with this link: http://www.elliottwave.com/a.asp?url=/freeweek/&cn=mcb.

Last week, stocks had an intraweek 50% retracement and bounced right back. This shows a strong market with "bargain buyers" willing to step up to the plate even with prices falling. Although the midweek dip may have only been the first leg down in a second wave correction -- in other words, another shoe could drop this week -- our newly-restarted Model Portfolio is off to a great start, up 4.41% as of Friday's close.

The mining stocks certainly helped as they had been a temporary drag when we first bought them. But, the mining indices certainly point to more gains ahead:

Dips are buying opportunities in several markets and we'll look at them in this weekend's Detailed Comments for Subscribers.

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posted by Bob Carver  # 7:31 PM

The accumulation-distribution pattern in the NYSE Composite Index shows that the line has already moved to a new high with prices lagging slightly behind. This is bullish divergence, with a promise of new all-time highs ahead:

One of the strongest sectors has been the Oil & Gas Index. It projects higher prices into 2006, although an intermediate term peak in late February (coinciding with a peak in oil prices) could send the index into a consolidation for many months:

That late February peak in oil prices could coincide with the beginning of the next leg up in the broad stock market. It's also lining up as a very significant turning point in interest rates (from down to up) and a big pickup in economic activity.

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posted by Bob Carver  # 7:45 PM

Contrarians know -- it's always good to examine the case for the other side, no matter how strong your own opinion is. And, it's totally free:

Free Week at EWI Is Here: Starting Wednesday, February 9th at 5:00pm EST, you can get one FreeWeek of forecasts from Elliott Wave International.

You'll get forecasts for the DJIA, S&P, NASDAQ, Gold, Silver, Bonds, U.S. Dollar Index and analysis of cultural trends from Elliott Wave International, the worlds largest and best-known market forecasting company. EWI uses the incomparable Elliott Wave Principle to provide forecasts of every major freely traded market in the world.

During their FreeWeek event, you get complete access to three forecasting services: The Elliott Wave Financial Forecast, Short Term Update and Robert Prechter's Elliott Wave Theorist. You shouldn't miss this event. You can get access to their FreeWeek by clicking the following link: http://www.elliottwave.com/a.asp?url=/freeweek/&cn=mcb

We've mentioned that bull markets climb a "Wall of Worry" many times. This retracement is a good example of how the market will plunge and shake the shares from the hands of weak investors. However, amidst the carnage, the mining stocks showed good strength and may have turned the corner, along with the US Dollar (in the opposite direction, of course).

The resignation of Hewlett-Packard's embattled CEO set the stage for the selloff in IBM shares. That stock dropped back to the rising support polytrendline. Although we did expect a retest of that trendline, we did not expect it this soon. We'll be watching IBM for a possible sell signal in coming days.

We had remarked on the market looking tired in recent days. While there was the notable exception of last Friday, with strong volume and a breakout through important retracement levels, the volume on the rally has admittedly been too weak to carry the market substantially higher. Indeed, the Small Caps were the only index able to briefly punch through to a new all-time high last week before slipping back. Thus, we should look upon this pause as a time for the market to gather its strength for a stronger assault on the highs. Monday is a turning point from the point of view of several indicators, so a consolidation into that timeframe would be longer term a very positive development. We had thought it would be a high, but a trading low would be a more bullish scenario.

The pullback doused nascent bullish sentiment. Our OEX Dollar-Weighted Call-Put Ratio, which was over 3 on Tuesday, fell below 1 on Wednesday as traders rapidly changed their minds about the rally. That's another positive development.

The high tech sectors were hard hit in the 2000-2002 bear market. And, they have yet to recover fully. The leading indices in the high tech sectors are the NASDAQ-100 (NDX) and Semiconductor Sector (SOX). Although they continue to be very weak, the resistance polytrendline drawn along the highs in the SOX chart project an upturn coming in a few months:

Charts like this, which show the advance-decline line for the index charted, can be found on our Daily Index Charts page on our subscriber website. The names of these charts end in "ADLINE"; the chart above is named "SOXADLINE". Similar charts of DJ, NDX, SPX, VLE, MID, SML, BTK, HUI and XAU can be found on that page.

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posted by Bob Carver  # 8:04 PM

Free Week at EWI Is Coming Wednesday: Good news! Starting Wednesday, February 9th at 5:00pm EST, you can get one FreeWeek of forecasts from Elliott Wave International.

You'll get forecasts for the DJIA, S&P, NASDAQ, Gold, Silver, Bonds, U.S. Dollar Index and analysis of cultural trends from Elliott Wave International, the worlds largest and best-known market forecasting company. EWI uses the incomparable Elliott Wave Principle to provide forecasts of every major freely traded market in the world.

During their FreeWeek event, you get complete access to three forecasting services: The Elliott Wave Financial Forecast, Short Term Update and Robert Prechter's Elliott Wave Theorist. You shouldn't miss this event. You can get access to their FreeWeek by clicking the following link: http://www.elliottwave.com/a.asp?url=/freeweek/&cn=mcb

The stock market consolidated its gains Tuesday after a 9-trading-day advance. This consolidation is best counted as a wave 4 within a five-wave Elliott Wave move. After five waves up, we should see a larger retracement, which will provide yet another buying opportunity as this bull market climbs a Wall of Worry. A true bull market will rise relatively slowly, with brief, but sharp, corrections. It's those sharp corrections which dislodge traders from their positions.

The Wall was looking a bit ragged Tuesday, though. Our OEX Dollar-Weighted Call-Put Ratio came in at 3.39, reflecting a huge imbalance of option speculator bullishness. Now, a ratio this tilted to the bullish case isn't immediately a contrary indicator. Typically, we will see a "declining tops" pattern in the ratio as we approach the actual trading high -- often the top is signaled with a ratio of 2:1 a couple of days before that actual price high.

Yesterday, we called the Social Security system a Ponzi Scheme. Some claimed we were making a political statement. Nope, we were simply stating a fact, not taking any position on Social Security pro or con. Nor were we making a political statement. The only real difference between Social Security and a true Ponzi Scheme is that the former is legal and the latter is not. If you want more information on the subject, read Insecurity of Social Security ("http://www.finance.cch.com/text/c40s05d060.asp").

John Mauldin sends out a couple of interesting articles every week. In this week's "Outside the Box", he features an article entitled, Inflation is Always and Everywhere a Monetary Phenomenon, ("http://investorsinsight.com/article.asp?id=jmotb020705") which admittedly isn't that catchy a title. But, the author, Myles Zyblock, makes a compelling case that we are in the midst of a major trend change in interest rates and inflation.

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posted by Bob Carver  # 5:25 PM

Free Week at EWI Is Coming Wednesday: Good news! Starting Wednesday, February 9th at 5:00pm EST, you can get one FreeWeek of forecasts from Elliott Wave International.

You'll get forecasts for the DJIA, S&P, NASDAQ, Gold, Silver, Bonds, U.S. Dollar Index and analysis of cultural trends from Elliott Wave International, the worlds largest and best-known market forecasting company. EWI uses the incomparable Elliott Wave Principle to provide forecasts of every major freely traded market in the world.

During their FreeWeek event, you get complete access to three forecasting services: The Elliott Wave Financial Forecast, Short Term Update and Robert Prechter's Elliott Wave Theorist. You shouldn't miss this event. You can get access to their FreeWeek by clicking the following link: http://www.elliottwave.com/a.asp?url=/freeweek/&cn=mcb

Interesting Bond Market Factoid

Among much other useful investment info we recently gleaned from Don Coxe's latest call (Realplayer link: http://www.jonesheward.com/Commentary/p_Commentary.aspx Windows Media Player link: http://www.bmoharrisprivatebanking.com/webcast.asp):

Last year, the US trade deficit with China was $176 Billion. The Chinese, in turn, bought $175 Billion worth of US Treasuries. Must have been a rounding error someplace -- they missed balancing the account by a billion. We bought their goods with dollars and they purchased our governmental debt with those same dollars.

What a wonderful exchange we have with the Chinese: we get the goods they produce and they get our paper in return. And, as a side-effect, interest rates bump along at record lows, blowing real estate Bubbles all over the land. All of this financial engineeering is courtesy of the government which brought us the Social Security Ponzi Scheme.

The TYX Index measures the interest rate on the 30-year bond. It looks like it's headed for a double bottom very soon. This is going to setup a wonderful opportunity to sell bonds short:

Stocks paused in the uptrend Monday, but this rally isn't finished. After a brief rest, stocks should break to new all-time highs once again. Actually, the small caps already did -- they poked their heads above the old high intraday on Monday. The others should follow the charge up the hill no later than Valentine's Day ± a couple of trading days.

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posted by Bob Carver  # 5:40 PM

Free Week is Coming Again This Week!

The US Labor Dept announced on Friday that a shockingly low number of new jobs had been created in January. Does this mean the economy is falling back into recession, as the bond market has been intimating for months? Well, we don't think so -- we think this is just a "mid-cycle" pause before an acceleration higher in jobs and economic growth, but the level of repurchase agreements issued by the Fed suggests a weak economy very similar to that of exactly one year ago. You'll recall that the "soft patch" of 2004 persisted into August:

The interesting thing about the 146,000 new jobs created in January is that the Labor Dept subtracted 280,000 from the figure that was actually reported for the month before coming up with the number. That means that the raw figure reported to the government was 426,000 new jobs. For whatever reason, the statisticians at the Labor Dept think that somehow employers overcounted more than a quarter million new jobs in one month. At least they're consistent: they subtract similar figures every January.

The other puzzling aspect of the report was that the unemployment rate actually dropped to 5.2%. It wasn't that long ago that an unemployment rate of 6% was considered "full employment" and anything lower highly inflationary.

In light of these odd, contradictory figures, perhaps its not surprising that not only did the bond market soar on expectations of a recession which might be underway now, but both the stock market and the US Dollar rallied sharply higher! That was a definite shift in pattern as rallies in the bond market had correlated closely with declines in stocks as money sloshed out of equities and into yield-bearing instruments at the slightest hint of economic weakness. Apparently, the stock market concentrated on the idea that the Federal Reserve would have to stop raising interest rates due to the weak economy.

It's very likely that one of these markets is wrong. But, which one? We'll discuss this point in this weekend's Detailed Comments for Subscribers.

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posted by Bob Carver  # 8:55 PM

The market slipped down the greased pole Thursday as the Monthly Buying Spree seemed to subside, as expected, but the buyers were eager to use the dip for opportunities. The old laggard Dow lost only 0.03% for the day, but our Relative Strength measure showed the Value Line underperforming the Dow by 0.28% and the Russell 2000 underperforming by 0.40%. Since these are two of the strongest sectors, it's clear that the retracement isn't over just yet.

Moving to the NASDAQ, where we like to see the NASDAQ-100 (NDX) and the Semiconductor Index (SOX) leading the market, they were backpedaling furiously, both down over 1% compared to the Dow. Again, it's clear that more of a correction needs to occur before the market can build up a good head of steam to the upside.

The correction is likely to retrace 38-50% of the initial leg up and should bottom along the support trendlines shown on the quarter-hourly charts on the website. That should mark a great trading buying opportunity for a more powerful leg to come in the future.

The big news Friday will be the January Employment Report, which is due out at 8:30am EST (7:30 Central in Chicago where bond trading is expected to be fast and furious). As we showed you yesterday, the range traced out in the hour following last month's report enveloped the entire ensuing month in the 10-year note market. This month's report is likely to see a more muted reaction, but the contracting triangle pattern that is being traced out suggests no overall direction is likely to be found until that pattern is completed.

Stocks will likely take their short term cues from bonds. If the bond market goes up, stocks should go down, and vice versa. At this point in the economic cycle good news for bonds is bad news for stocks because good news for bonds would be an approaching recession, which is not good for corporate earnings.

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posted by Bob Carver  # 9:57 PM

Amazingly, since the last Employment Report, the March 10-year note futures have traded within the price range of the day that report was released!

The support polytrendline rolls over its high in late February. But, the apex of the triangle is in March. Those two measures of the top are saying we will likely have to wait until the next Fed meeting to see a real top in the bond market.

January's Employment Report will be released on Friday morning at 8:30 am EST. We offer the caveat that if you're trading bond futures, it's good money management to flatten positions going into the report. You can see from the chart that they took out both the longs and the shorts last month in a big hurry and ended up going nowhere for both that day and for the whole month.

The stock market is looking tired here and although it did move up on Wednesday, it's time for it to come back to retrace some of the recent gains.

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posted by Bob Carver  # 5:49 PM

It's not hard to find bull markets these days -- they're all over the planet. Starting with one of the strongest bull markets, here is the Australian stock market:

The Dutch AEX clearly wants to push higher:

The British market has a lot of potential left -- and could easily exceed our target zone:

The US market has been in new high ground now for over a year:

There's always a bull market somewhere -- you just have to know where to look for it. The small cap index (SML) has already retraced 70% of its January decline!

However, the market rally we've been enjoying started on the 24th. It has pushed the leading indices into the upper Bollinger Band. Now that's very bullish because it indicates that higher highs are definitely ahead. But, it also may bring in a minor pullback. This is an ongoing uptrend, a "wave 3 of 3" so to speak, and it's no reason not to put fresh cash to work if we do get that dip.

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posted by Bob Carver  # 9:45 PM