Our bias remains at Buyer’s Caution, as it has all year.
However, we’ve noted several reasons to expect the market is primed for another short-term pullback/correction. Increased volume with modest price advancement and an outright distribution day Thursday tell us funds are taking some off the table at the new high levels for the major indexes. We’re also seeing some key leaders stumble.
Our bias will remain at Buyer’s Caution until we see evidence of more significant decay. For those who ask why we’ve never went into a full Buyer’s Edge bias, it’s because the bull has been partially fueled from the effects of quantitative easing, which means the Fed controls the throttle, leaving our analysis quite vulnerable unlike previous bull markets.