Well I am back from vacation and I see that the markets have not changed much in the last week. Oh sure, fear is rampant, but looking at our momentum indicators, particularly the slow momentum shows a flattening to slight up bias. Don't take that as a cause for any immediate optimism, we are still being buttressed by strong negative TradeWinds. It is starting to feel like we may be seeing the worst of the worst.
Today's pre-market is looking a bit iffy so there may be another wash out day by Miss Market before we can really call a bottom. Volume has been increasing during the recent sell-off which suggests that the pool of sellers may be ready to be exhausted. Even if we do get a bottom, that does not mean that sunny days are ahead. We should see an oversold bounce at some time, but after that it could just be a flat market in tepid TradeWinds as opposed to a raging rally. Let the momentum charts tell you when we are back in positive TradeWinds.
In the meantime, if you want to trade long, you need to be looking at Biotechs (BBH), Pharm (PPH), Metals (GLD, SLV) and miners (SLW,GDX), and of course Oil (USO).
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