Yesterday’s market rebound was a welcome reprieve from Monday’s drubbing. Actually, only one event caused the financials to come back from abyss and that was Citibank’s announcement that it had received an outside capital infusion of $7.5 billion. After much negative news from the Subprime/credit crisis over the past few weeks, this was all the markets needed to stage a rally. Whether this is sustainable or simply another dead cat bounce remains to be seen.
Our Trend Tracking Indexes (TTIs) followed market direction, and we continue to have a split picture. The domestic TTI remains above its long-term trend line by +3.93% while the international TTI remains below its long-term trend line by -2.25% and thereby in Sell mode. That puts us in no man’s land, and we simply have to wait and see which way the market breaks, before making further adjustments to our portfolios.
Here is the link to the most recent ETF Master list, which has been updated with yesterday’s closing prices. This will enable you to work with more recent data. Again, the road ahead is extremely uncertain and it pays to be on guard against any sudden changes in the long-term trend via the execution of sell stops.