The Dow, Nasdaq, and S&P 500 all possess a sidelines rating; having said that, the Russell 2000 carries a fragile uptrend rating.
Thus we've got the bullish predicament where small caps or the Russell 2000 is actually leading the key indices higher.
People, I give the bulls an incredibly slight advantage on the bears entering trading Tuesday (market's closed for Monday due to Memorial Day). The advantage is so little, I still advocate you keep back on the sidelines plus continue to gather cash in your trading account. We simply don't have a group that is dominating at the moment (either bulls or bears) we may place our gamble on with any degree of confidence. While you're in a stock trading market like this, it really is safer to remain on the sidelines, accumulate cash, and keep your powder free of moisture.
The market internals help support my thesis that bulls have a very slight advantage over bulls however, not enough to wager on.
The percent of stocks on the NYSE which are trading above their 50 day moving average is actually right on 50%. Put simply, neither the bulls nor the bears hold the edge right this moment. The percent of stocks on the New York Stock Exchange that are trading over their 200 day moving average is 75%. All of us expect this much less sensitive indicator to keep higher. It's a lagging indicator given it is based on a much longer period of time. It does suggest that the longer term uptrend continues to be intact.
The TICK experienced a swing move down that I talked about a week ago which hit about -460; however, by the close Friday, the TICK performed a upward move higher to hit about 580. That shows that if you take institutional investors all together, there is even now a slight bullish opinion. Remember, the institutional investors keep every one of the keys. These people power the trend (reality) of the stock market. You generally want to trade in the direction of institutional investors, definitely not against.
The VIX remains at ultra-low levels and also supports a slight edge for the bulls entering trading in a few days. It dropped back under the 50 day moving average so the 50 day moving average is below the 200 day moving average, as well as the VIX is beneath the 50 day moving average. All three are dropping. Presently there is just not any kind of PUT buying or hedging happening at this time.
Good news for gold and silver investors. I am downgrading the U.S. dollar to a downtrend ranking. It looks like it's going to be going down over the coming few days which will continue to support the up swing move in gold and silver.
Gold continues to possess a strong uptrend ranking. Silver has increased on the dollar weakness into a uptrend; on the other hand, it has closed right on top of the 50 day moving average. While silver is within an uptrend, I might hold out to observe what happens with the 50 day moving average. When silver can break through the 50 day moving average and also confirm with regard to at least 1 trading day, it will likely be a good long play.
The all crucial XLF (Financials) remains in a downtrend. I discussed XLF last week and how the 200 day moving average stands out as the all crucial place you'll want to keep your sight on. It is still all about XLF. Recognize that when XLF gapped down under the 200 day moving average last week, the whole market sold off. When it climbed back up to the 200 day MA, the whole market went up. We are currently nearly right on the top of the 200 day moving average exactly like we were last week. Folks, keep your eyes on XLF. If the bulls can take it again over the 200 day moving average and we have at least one day to confirm, we might get a rally. Alternatively, if the 200 day moving average now turns into resistance as it bounces back below this place next week, we could be in for another swing move lower on wall street.
The stock exchange is going to be closed on Monday, May 30th 2011 for Memorial Day.
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