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All Clear? Maybe Not June 8, 2019

Posted by Tom in Thoughts.
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June 7, 2019 – My short term market model, that I use for trading (not shown), went to Cash on Friday after being 50% short.  The chart below shows Market Sentiment & Money Flow negative but improving.  Volume Flow and Price Strength did just kicked into positive Bullish mode.

So is this the ‘V’ bottom and the worst is over?  Not quite so fast.  Friday afternoon the Trump Whitehouse announced that the tariff threat was suspended and I doubt too many traders wanted to be in a short position over the weekend anyway.  This market was waaay oversold and due for a rebound; and that’s what we got.  The break on Friday above 7645 was a sign to remove the hedge (short) but not the “all clear” sign.  Maybe next week.  7965 is the level of Resistance to further upward prices.

The sector table (below) shows a shift from Government Bonds & Utilities back toward equities (Consumer Goods, Industrials, Healthcare.  Volume was modest of Thursday & Friday so it maybe premature to say that we’re back to a “risk on” status just yet.  I’ll be watching the Russell Small Cap Index for clues of strength.  Also seeing money flowing back into Technology would be a big positive sign.

So the word is be cautious in here and this is not showing the level of “Demand” that I’d like to see coming off of a “V” type bottom.  Early next week watch for price strength and the volume behind it, otherwise this may just be a shake out.  Have a good week.      ……….. Tom ………

Price chart by MetaStock; pie chart & table by http://www.HighGrowthStock.com. Used with permission.

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