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Strong but A Little Tired April 2, 2022

Posted by Tom in Thoughts.
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April 1, 2022 –  This market is showing significant strength based on many indicators but the one the stands out the most is the McClellan Oscillator which measure market breath.  No doubt about it, more stocks are advancing than declining and thus money is flowing back in, but likely at a cautious rate.  Note the low volume on the chart below.  It appears that a good bit of the recent strength was generated by the “unwinding” of put options that were placed as a hedge during the correction.  That’s behind us now.

click on chart to enlarge it

So the question is whether this market can continue higher.  I’m thinking that it is due for a small dip down or at least a base building period before moving significantly higher.  First quarter earnings are in front of us so that could provide a spark . .  or disappointment.  Of course the wild cards in any market move is the unknown . .  that being Ukraine and COVID.  I don’t think the interest rates or inflation bothers investors very much; they were generally expected.

The Short Term Sector Strength table is shown below –

I see that Utilities and Real Estate are higher that Financials and Technology.  Not exactly a sign of confidence in the growth area right now.  This move may take a while and be rather selective in nature unlike the previous 2 years where just about everything did pretty darn well.

I’m about 70% invested right now and looking for more opportunity but I’m not in a big hurry.  Have a good week.        ………..  Tom  ………..

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

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