Yesterday saw a not surprising down day in the markets. Our mini-rally was getting overheated, so there was some therputic release of the the overbought pressure. You can see that our fast momentum graph has taken a down turn, but that our moderate and slow momentum indicators were unfazed by yesterday's action. This is healthy. The momentum indicators can go in different directions for a few days as the excess is worked off, when they all get back in unison (either up or down), then we have another good entry point.
Not surprisingly, a lot of the ETFs and stocks that I track also posted a down turn in the fast momentum and fell into the neutral category. Not a big deal, just means we sit on the sidelines for a day or too and see if the this downturn is just the "pause that refreshes" or is a reversal to a downward trend.
Overall the negative momemtum continues to burn off, but we still have strong long term winds in our face, so if you are long be cautious.
We saw a lot of the agriculture stocks move into our top 25 yesterday - POT, MOS, MON, TRA, MOO. I am also detecting a revival of the solar industry in the rise of CCC, WFR and FSLR. Biotech, BBH has made a nice move. And transports remain strong - IYT, CSX and GT.
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