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February 25, 2017 – Weekend Market Comment

February  25, 2017 – Welcome to my weekend market comment, an analysis tool I use in my own portfolio decisions, published free to the web every weekend before the New York opening bell. You can read the latest version each week by bookmarking For full details read my disclaimer (link at the bottom of this page).

A number of short-term caution signals are showing up for stocks which might be hinting that the current rally is due for a pullback. Some of those caution signals are coming from relationships between the three Dow Averages. The Dow Jones Transportation Average unable to hold its recent move to new high ground. That raises the possibility of a short-term rally failure. 

Here is what our charts say:

101 Bull Bear
Bull market (dark green over red)  the dark green 50 day average is in a firm uptrend.  NOTICE THE SLOPE (second window), we might be starting another long ride up.  Bull market -- expect bullish outcomes.

103 NYSE High Low Market Forces
Wow breadth is still very strong. Nothing but strength. 

105 Non Farm Payroll
Lots of jobs! But beware this is lagging indicator. The smart money is gone before this turns down.

107 Industrial Production
Flat but strong industrial production.  That is good news.

115 Renko
15 bricks up that must be a record!
203 OBV
OBV (red line) is with the market. Bullish!

207 VIX
Fear is way down, in fact to all time new levels.... For now Bullish but overdone.

209 VIX Evaluator
Very much bullish.

211 S&P500 over 50 day
Now about 78% of stocks are above their 50 day MA,  up from last week when it was 76%.
213 Green Arrow
Only put new money to work when I draw a green arrow. NEW Green arrow!  Notice loss of TRIX momentum.

301 NASDAQ Summation
Nasdaq breadth is rolling over. Pay attention trouble could be brewing.

303 Aggressive Defensive
Clearly defensive.

305 Consumer Bonds vs Equities
Bonds perk up. Consumer stalls

307 Bond Direction
Bonds tick past moving average. 
309 Sectors

311 Nations
not much here

313 Major sectors
not much here -- all about the USA.

! = Pay attention this chart is important this week.

What I Find Interesting

Acording to the South China Morning Post, China has unseated the USA as Germany's largest trading partner. I can't wait for Trump to Tweet "Not Gonna Happen" on this one. 

What Works Now

Time Warner (ticker:TWX)

What I Think

I think it is a bull market and you should be optimistic. It is true that the Trump rally is getting long in the tooth, and looking at the 309 sectors chart this week money moved into utilities and consumer staples -- the defencive stocks. 

Below is a chart of the CRB index, a general feel for commodity prices. If the global economy is so great why are commodities lagging? I suspect as you can see from the cat above, that the words of Trump are just words and that global trade might be stalling. 

I am rotating from aggressive to a more defencive stance. You are in a Bull Market, this could be a rest or even a small pull back but I am still going to be long the market. 

You can learn more about my indicators by visiting the CME4PIF school by clicking here.

Don't squint, All graphics can be enlarged by click on them.

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