Short-term: Neutral
Momentum continues to suggest a consolidation. Breadth has been deteriorating on the NYSE and the Nasdaq as the market climbs. Recent outperformance of value vs. growth may point to increased risk-aversion, considering the strength of the rally since March. Financials have shown relative outperformance (a positive), while Technology has shows relative weakeness (a negative). A consolidation (rather than a correction) is more likely, with further gains ahead. This rally is aging, however, and profit-taking (as well as stop-tightening) may be prudent. For Dow Theorists, both the Dow and Transports have confirmed a new 2009 high.
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