I have been watching the week's rally with much interest to see if will get a firm foundation, and so far that seems to be the case.
Our momentum charts are all pointing in the long direction, but the all important slow momentum, while improving, is still in stormy waters, so the all clear cannot be signaled yet. All 30 out of 40 indexes/ETFs that we track are still in the stormy TradeWinds.
We have been saying that Healthcare (XLV), biotech (BBH) and Pharma (PPH) are the leading sectors for now. The latter has slipped a bit but the other two remain strong. There is improvement across the board with the exception of Oil/legacy energy. China is coming back strong, as are financial stocks. (Be wary of the financial area once the 30 day freeze on naked put selling expires.) Precious metals still confound me, so I am staying away from them.
In summary, market is showing some signs that its has bottomed and is now looking beyond the election and sees the end to the housing/credit crisis. But we all know that Miss Market just loves to play with our heads, so take nothing for granted. Let the momentum indicators tell you if this bounce turns into a trend or is just a correction within the crash.
Rally On.
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