We continue to monitor the effects of the correction that began towards the end of January. Stocks are up for the second week in a row, both in the US and globally. We are at the same points as last week with the Core Indicators. The Global Stock index is still below Cash, but the spread is tightening. We could potentially see another wave of selling to complete this correction in the cycle, especially with the Bull Market being over 2 years old, but we are mostly seeing longer-term sideways patterns forming. However, there has been movement in the shorter term.
The Tactical Indicators are both Neutral but have improved again this week. The 10-week has now moved to the 58% level, which significantly exceeds the previous higher X column level of 44%. Short-term momentum appears to be building to the upside. We wonder if this price action is going to set up a significant buying opportunity and if the correction is ending, especially after 3 months. The Overbought/Oversold Indicator is still neutral as well. With the bounce from 500 in MSCI All Country World Index, this week, we have seen trading between the Bull Trend Average and the Oversold levels. The Oversold levels continue to rise in the channel, one which may be flattening as the sideways trading continues. We still believe that these movements will not upend the current Bull Market but rather serve as a natural shake out of risk to refresh the cycle. We will have to see if the lows are retested first.
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