Stocks put together a good week, with a rise in both US and global stock indices. While more recently, we have seen better breadth of participation in the market, over the longer term, we still have not seen the full move to the upside that we would like. Thus, the Universe Trend Indicator is still Negative. We would like to see some material improvement. The Cash Comparison is still Neutral, and until we start to see some distance between the Global Stock Index and Cash, it should remain Neutral. This action leads us to believe that a rally may not have steady legs. We did see an opportunity to put some more cash to work, but once again, the seasonality and cyclical concerns that counteract our Confirmed Up signal tell us that we do not need to jump in fully. One month in, and we still hesitate to rush into the markets.
The Tactical Indicators remain Neutral. The 10-week moved up to the 60% level, with a new upward column of Xs forming for June. A small short-term triangle may be forming on the chart. The Overbought/Oversold Indicator is around 2.3% below the Bull Trend Average, and for another week, the MSCI All Country World Index continues to trade sideways between the Average and the Oversold level. The range has been narrow, but the support levels are rising. A 3% drop would get up to the Oversold zone. We have not seen a selloff, but we also have not seen a rebound. We are holding some cash for a stronger risk-adjusted opportunity.
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