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Hello
this is part of a market letter i recieved today
(most which i agree)
Ben
Friday was strong.
All of the AD lines were strong.
New hgihs increased and new lows decreased on all markets.
The secondaries outperformed the blue chips.
Growth underperformed value in the large cap sector, but growth outperformed
value in
the mid and small cap sectors.
Many of the broad based and sector indices have had 3 consecutive up days as
of Friday's
close for the first time in nearly a month.
The short term signal went closed because the OC component went short.
The broad based short term signals are mixed.
Seasonally the first and last several trading days of the month are strong.
This is not true
of the first trading days of August, they have been weak in the past decade.
I have mentioned frequently recently that we are at or near, my
interpretation of, 90 day cycle
lows. The next 2 trading days are seasonally strong, if they are up, most
of the indices will
be more overbought than they have been since early May. The first few
trading days of August
historically have been weak so a retest of last Tuesday's lows in the early
days of August
would not be surprising. My expectation from that point is a pretty good
rally lasting 6-10 weeks.
Sentiment is improving (getting more bearish):
The commentators on Wall Street Week Friday night were noticably less
bullish than usual.
The AAII sentiment survey has turned decidedly bearish:
Bullish 29.5% down from 50.0% 2wks ago
Bearish 38.1% up from 15.2% 2wks ago
The large cap component of the short term signal went short, so I will be
moving both the
Rydex Titian/Tempest and Profunds accounts to cash as of Monday's close.
Banking is overbought so that account will be going to cash as of Monday's
close.
The small cap component of the short term signal is still long and
seasonality is most effective
with small caps so the Rydex Mekros account will stay invested until
Tuesday's close.
Good luck
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