Market Update
Market Signals Mixed I need to admit up front that market action is getting somewhat ambiguous. On one hand, stocks making higher highs and higher lows is bullish. On the other hand, there are still lots of bearish signs out there.
The rally we have seen over the past couple of weeks was led by beaten down sectors that were extremely oversold. In a strong market the more aggressive “risk on” sectors would be leading this advance. Also a concern is that Transportation, Small Caps, and Junk Bonds are lagging and all are still below their downtrend line.
Stocks were able to advance above a layer or two of resistance, which is bullish; however, there is still major resistance above. Stocks are still overbought, so buying this market now is probably not the best entry point. It is a much lower risk strategy to buy the pullback once stocks become oversold.
Client Update
Currently, we have most client accounts invested primarily in money market funds. Money market funds are safe investments that do not fluctuate in price and are a good place to park our money while we wait for stock and bond market conditions to improve.
I am looking to evaluate the next pullback. The character of that pullback will determine if it is a good entry point to begin to get back into stocks.