I know I sound like a scratchy-if-not-broken record that is trying to play polka music at a rap concert, but here goes even if you are tired of me being less than excited. This market appears to be weakening to me. On Sunday night, I offered up a “well-timed” piece that expressed a warning sign that kept bugging me when I did my analysis for this week’s signals. The market promptly took off yesterday making me sound like a moron and yet, I wouldn’t change a thing about my cautious post. As you will note from looking at the stock signal changes this week, I gave 177 new DOWNs compared to only 72 new UP signals. That is not unexpected given that the HEDGEfolios universe currently has 3 times as many stocks with bullish expecations. However, it makes my point that there are less stocks out there that are not already owned. I don’t see a new round of stocks to be uncovered that look like new leaders able to push us higher. Bulls will have to rely on more money being poured into existing winners to keep the momentum going. Based upon some of the money flow data, it does seem like retail investors are pumping up mutual funds with portions of that excess cash sitting on the sidelines. We’ll see how long that lasts but don’t underestimate my respect for the ability of late-to-the-party investors to prolong a rally.

I expect tomorrow’s reaction to the FOMC decision to be a negative for bulls. I don’t believe we will see a change in rates, however, I think the Hawks will be given a chance to jawbone their concerns for inflation and therefore, the statement will be frustrating for the crowd that had prematurely started to price in a cut when they finally got done with their “one-and-done” bullshit. Additionally, I think Jeff Lacker might get a voting buddy (or two) this time around.

I continue to stick with several of my forecasts from the what next post especially those regarding higher levels for treasury rates, oil, and commodities. It appears that my concerns about North Korea and Iran were correct, but the markets really didn’t care, so go with the markets (not me.) Most importantly, I was wrong (so far) about the strength of earnings season. If reports continue at the existing pace, we will likely see 17% earnings growth and guidance has not been overly discouraging. This is a legitimate reason for the bulls to be happy.

As for me, I am still bullish but something needs to change for me to believe that the current move will push us much higher.