This past week I had lunch with client and he asked why I was so negative?! I told him I wasn't, in fact I am almost fully invested. As you'll see by the Chart below, we are still in a Cyclical Bull Market. But within any Bull, you can have corrections(Last fall) and cycles. What we are trying to do is to navigate the cycles and that is why is why we are heavy in Bonds, Bond Proxies and Gold. As the cycles change, we will.
Short Term -Neutral, negative bias - No surprise we had a bounce late in the week, after oversold conditions. Th employment report can be looked at in different ways, bullish or bearish, the markets chose the former. Terrible volume tells us no conviction. With earnings season about to kick in, we'll stick with our signal.
Mid-Term - Still below the wedge and momentum has stalled, this reaffirms our negative view on the mid term.
Long-Term - Relative Strength sloping down(Top of Chart), with S&P going up. This is called Negative divergence. Momentum just can't turn above the red line, so we are still negative.
The Fed continues to behind the curve(Again) and now continuing to pump in 75 Billion daily, thru 11/11. Not a good sign....Stay nimble and pick your sectors wisely. For us Bonds, Bond Proxies and Gold have been a good place to be.
As always, it's a good time to #staynimble.