Based upon the market action this week and the incessant commentary, you would think that the bears were on vacation during the majority of August and were the only ones to come back. Maybe they were just hibernating like bears often do. Or maybe the bulls just woke up this week and said, “Let’s start selling.” Who knows? Regardless, it appears to many out there that the bullish trend is as over as the summer vacations are. That may be true but I don’t see any evidence, atleast not yet. For all the criticisms about weak volume in the preceding two weeks, the past few days have not been high volume either. It’s not surprising that the people who said the market was going up on light volume are being ignorant and silent about the market going down on light volume. For my part, it’s possible that bulls also came back from vacation and took some profits although I cannot prove that either. I have not been discouraged by the market action given that the majority of declines have come in the first half hour and the rest of the trading days have been uneventful. At some point, we will see whether there is buying on these dips.

At HedgeFolios, new UP signals outpaced new DOWN signals this week at a rate of 6-to-1. I am still maintaining the bullish tone that the HedgeFolios Timing Indicator is showing and I just don’t see the trend heading in the downward direction yet. One note of caution, the HedgeFolios Timing Indicator is approaching levels that have previously preceded the end of current trends. But that may be weeks away so I am going to focus on some current positives like: the FOMC still looks like it is going to hold, tensions in the MidEast are lessened, hurricanes have been few and not overly destructive, gas is declining rapidly, etc. etc. That can all change in a matter of days but I’ll wait for it to actually happen rather than trying to forecast it.

For any of you that are reading this and still on vacation - I hope you have a great time.