#MarketTiming – the rally to fool everyone continues

Been on vacation and been lazy so haven’t updated this blog for a month or so.

No matter. Nothing has changed much since first getting the buy signal on this upswing way back on the open of December 24th in this POST BELOW. Along the way I made the quote below in this entry back on January 7th — Santa leaves behind a “fast up” rally. :

So what now?

Probably more upside but it would be prudent to set stops to preserve swing profits. I’ve cautioned in the posts below that this longer term is a relief rally, and likely just the kind of rally the market uses to make everyone believe it’s the resumption of the multi-year bull.

The key here is go along for the ride but guard against being fooled by how fast the up.

This is still my overall opinion. This is a bear-market rally. It has been and continues to be spectacular but it is still likely to be the rally to fool everyone into believing the bull is alive and well. And maybe it will turn out that it is but no matter. The key is be long as long as it lasts but don’t fall in love with it.

Long-term breadth, as measured by the McClellan Summation Index, the $NYSI (obviously the most important stock market timing signal there is), has been rising now for 37 trading days and yesterday short-term breadth, as measured by the McClellan Oscillator, the $NYMO, turned up from a dip last week giving a renewed general market buy signal for today’s open (see the chart below).

It is a notable uptick since the $NYMO, as it often does ahead of a downturn, was giving warnings that the rally was flagging but the new low above a low in the $NYMO pattern (see green circle on the chart) suggests there is at least a week more of rally to come.

So, as I said above, nothing much has changed this year. The trend is up. Be long and don’t even think short. For now.

(click on the chart for a larger view)

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