The bulls claimed victory on Tuesday because the markets held their own and closed around the break even point as the chart from MarketWatch shows. These days it seems to take very little to keep the bulls happy.
However, Fed chief Bernanke’s saber rattling about inflation and potentially higher interest rates boosted the dollar but caused other markets to decline. Heading south more sharply than the above closing figures indicate were Emerging and Latin American Markets along with Gold, Technology and the Commodity Index.
Our Trend Tacking Indexes (TTIs) declined as well and are hugging their long-term trend lines as follows:
Domestic TTI: +0.16%
International TTI: -5.59%
Domestically, we are approaching a sell signal, barely 30 days after receiving the Buy on 5/15/08. If this sell comes to pass, it will definitely qualify as a whip-saw signal. I will clarify my exact exit strategy tomorrow as there seems to be some confusion based on several readers’ emails I received.