I had a slow trigger finger when considering signal changes this week and I hope the restraint will pay off. After looking over the charts and reading through a lot of research articles, I decided to rely on the Hedgefolios Timing Indicator (See ANALYZE MARKET STATISTICS) and stick with a generally pessimistic view of the market. However, as I have been hinting lately, I see some improvement in the technicals but I also see a lot of price increases that don’t look sustainable. Overall, last week’s action was rather constructive and I considered changing about 600 Down signals despite only pulling the trigger on 143. The market is looking like a house that is being rebuilt after sustaining some damage - things are coming together but still not safe enough to move back in. Regardless, the moves were pretty good but the volume was extremely unconvincing.

In light of the upcoming Fed action, I really like cash. Hedgefolios has an UP or DOWN signal on each stock I cover and those still apply. However, at times like this I would much rather be in the audience of a boxing match rather than one of the two combatants. It’s the classic “I’d rather be out, wishing I was in - than in, wishing I was out.” Good luck this week. I think it’s highly likely we will retest the S&P 500 lows from June 13th and 14th. I am not optimistic they will hold.