TradeWinds for May 28th

So far this week has played out in favor of the long side. Miss Market is always a bit coy, so its not a convincing argument that we have withstood last week's down draft, but she is hinting that we have.

The big thing to note on the momentum charts is that the Fast Momentum has bottomed and taken a turn to the long side. That comes after two positive, although not overwhelming days. The good thing to note about today's action is how the market attempt to break down, particularly among the financials, but then staged a nice move to the upside late in the day. That tells me that we have seen the last of the mini-correction. We don't trade on hunches alone, so we want some evidence to support that in the form of our Moderate Momentum indicator hitting bottom and moving to the long side in concert with the Fast Momentum. Let's see if that happens in the next day or two.

We have also seen a bit of slippage in the recent rally by the precious metals, Euro and Bonds. They never got back to a strong TradeWinds position. Keep an eye on that group as we watch to see if they are just regrouping for another long run, or if was a short side correction.

We the slow momentum still strongly in the positive TradeWinds zone, I like our odds of reasserting the move to the long side in the next couple of days.

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