So Far So Good For The Bulls
Since my minimum downside target was met on Monday the bulls’ response has been solid across the major stock market indices. All have rallied smartly. Below are the S&P 500 and Russell 2000. While the former looks to be in better shape than the latter, the Russell has more upside potential simply because it sold off the most.
Several things still bother me. Sentiment never fully cycled to bearish although market internals did. I don’t love the leadership set up in the market from my four horsemen of banks, semis, discretionary and transportation although we do own three out of four. Finally, our big picture market models have all over the place. Heavily long, mostly neutral and heavily short. I would feel much better if they were less schizophrenic and more in line with each other.
On Wednesday we bought FVD, XPO, PCY and EMB. We sold some MQQQ. On Thursday we bought QID, more HYG, more XRT and more PCY. We sold MQQQ, QLD, UWM, some SPYB and some TTI.
