Price action ticks higher. Our bias stands firm at Buyer’s Caution, as it has for more than a month now.
The one obvious thing about this market environment is a reluctance from large, institutional funds to sell in any meaningful way. The reasons to sell are strong – convincing enough to believe we’ll see some serious carnage before the year is out. Until then, we call it as we see it. Best to stay defensive and not risk shorts just yet.
We’ll be there when it happens.
No doubt there’s a good deal of short covering going on as the major indexes give a stellar rally Thursday. I suppose this is why we’ve held back from an outright bearish bias, though we still remain cautious bulls.
The fundamental reasons to buy right now are not that strong. Let’s look at what kind of follow through from top Growth Stocks and other market leaders give these next few sessions. The Semiconductors ($SOX) broke out convincingly today, they too will also be a good measure of the environment going forward.
One of our favorite bellwethers, the Semiconductor Index ($SOX), isn’t giving much of a tell these days. Recent carnage of bulls and bears trading this vehicle are likely to have created a game of “you go first.”
Seeing as how the Semis tend to endorse broader market trends, we’re looking at this environment as a risky one for bulls, despite the fact that the Semis remain in a technical uptrend as the $SOX hugs its 50-day moving average.