Despite last week’s sharp market rebound in equity ETFs, it remains to be seen if that action was simply a sucker’s rally or the beginning of a new uptrend and resumption of the bull market.
While some momentum numbers have indeed improved, weakness prevails in the equity arena, while precious metals and government bonds of all durations continue to occupy the top spots above the cutline.
Ending with the close last Friday, we have now 43 ETFs positioned above the cutline, while 352 are solidly in the red. Much more work to the upside is needed to improve momentum numbers to a point where I would consider them investment material.
Take a look the latest report:
[If you are not familiar with some of the terminology used, please see the Glossary of Terms.]
As I have said repeatedly, this is not the time to be a hero and engage in bottom fishing below the cutline, as the trends clearly point down. Right now, you need to step back and let this situation play out until better opportunities present themselves. Remember these timeless words of wisdom: “Cash is a position too.”