Market internals are weakening

Weakeness in small caps, financials, and transports (which failed to reach a new high as the DOW achieved its new high) are cause for concern. Weekly charts have also begun to roll over.

Click here for the updated Market Tour.

Uptrend on weak footing; neutral stance

Market gains have been accompanied by weakening breadth and tentative volume. Relative underperformance in Financials and Small Caps (a flight to the safety of large caps), a declining trend in the McLellan Oscillator, and suggestions of a possible bottoming in the dollar, reinforce the weakeness of this uptrend. Although the trend remains up, the reward/risk ratio is unfavorable at these levels. We are focusing on large caps and mutual funds/ETF's with a more conservative bias, and hedging with partial shorts.

Take the Stockcharts.com Market Tour

Market extending for further gains

Positive breadth, improving volume on the upside and seasonal strength are providing fuel for further gains. SPX target of 1200 remains in play.

Click here for the latest update on Stockcharts.com