Special Bulletin: October 15, 2019 (11am update)

Technical “internals” are improving as headline risk is decreasing. 

The technical condition of the stock market has improved and as a result our Current Market Outlook has changed to “Market in an Uptrend” with a “green” light. Our “Core Four” internal indicators show one yellow and three green signals. Net result: the uptrend is underway again.

One caveat to this good news is that the number of Distribution Days on the S&P500 and the Nasdaq remains elevated. While no one knows if today’s strong action will evolve into a sprint to new highs, it is important to note that the internals are improving. Based on the history of the math of the market (the technical internals), we stand by our statement from our post of September 27th that it does not look as though the stock market is setting up for a major bear market phase. 

With a “phase one” trade deal in the works with China, some investor angst has been reduced. However, the Feds interest rate policy continues to hang over the market. We recently noted the market was experiencing rotation into certain beaten down sectors. It will be very telling if this continues. Keep your eye on the major market indexes as they remain over their 50 day moving averages and are adding a bit of breathing room today. That’s good action.

Now that a strong move up to a green condition has happened, what should investors do? Begin deploying capital in a measured manner into quality investments with rising relative strength. Also, watch the key indexes’ 50 day moving averages as well as the number of stocks hitting new 52 weeks lows for any signs of returning weakness. The bulls have forced a turnover by the bears and are driving to the end-zone of new highs. Will the bears red zone defense prevail and sack the bulls for losses again? Or will the bulls score a touchdown of all-time highs? Time will tell… and quickly.  Have a Triumphant day! ®