The market appears to be rolling over a bit, thus creating lower highs and lower lows - or a short-term down trend. For this reason we are on high alert and are closely watching each position to determine if we feel it's worth holding or cutting. Our cash positions remain fairly high; however, being perpetual optimists, we're constantly looking for opportunities that are trending upwards. We are finding opportunities in energy, commodities and metals as of late. These are the types of asset classes (especially if international) that historically have performed well during periods of high inflation.
- So far, the market has pulled back above the major resistance level (red dotted line) that was what we refer to as the "line in the sand"; however, this may be short lived.
- RSI is negative
- MACD is negative
- Lower highs & lower lows
- S&P 500 needs to break out of the down channel trend in order to regain confidence of a continual longer-term up trend - otherwise we may have not yet seen the bottom.
S&P 500 Daily Chart
Source: Cannon Advisors, StockCharts data