Special Risk Capital Management LLC

Split Indicators – Caution February 26, 2016

I’m “on the road” so this weeks post will be short and to the point.

To the point, my market indicators” are split.  Sentiment is now bullish, but my trend indicators remain bearish.  This (usually) doesn’t happen for more than a few days, but now it’s been the whole week.  We broke above the downward sloping trend line then hovered near it.  I note that volume has not been average, but below that.  Folks are NOT jumping back in here.

So I remain cautious and wait for confirmation.  I look at the stocks that are moving up and most of them are “defensive” in nature.  Not exactly an endorsement of a new bull market.  I remain just a little concerned about the latest rally.  It has all of the signs of a short covering rally.  Here’s the chart of the NASDAQ Composite Index.

Things have “improved”, but we need to see (at least) a few confirmation signs.  I remain in a high cash status, but sure would like to buy something . . . but not quite yet.  🙂

Have a good week.   ……  Tom  …….