Good Monday morning and welcome back. While spring break season is underway and you may be more focused on getting to the beach or working on your short game, let's start the week with a review my key market models and indicators. Remember, the primary goal of this exercise (something I actually do on a daily basis) is to remove any preconceived, subjective notions about the markets and ensure that I stay in line what "is" really happening in the market.
The State of the Trend
We start each week with a look at the "state of the trend" from our objective indicator panel. These indicators are designed to give us a feel for the overall health of the current short- and intermediate-term trend models.
The State of Internal Momentum
Now we turn to the momentum indicators...
The State of the "Trade"
Next up is the "early warning" board, which is designed to indicate when traders may start to "go the other way" -- for a trade.
The State of the Macro Picture
Now let's move on to the market's "external factors" - the indicators designed to tell us the state of the big-picture market drivers including monetary conditions, the economy, inflation, and valuations.
The State of the Big-Picture Market Models
Finally, let's review our favorite big-picture market models, which are designed to tell us which team is in control of the prevailing major trend.
Bottom Line: The message from the indicator boards this week hasn't changed to any great degree as the bulls remain in charge and should be given the benefit of the doubt. However, too many big-picture models are flashing warning signs for comfort. As such, we must recognize that risk levels are elevated at this time. We believe that the market remains at risk for a correction in the near-term but that any pullbacks, declines, or sloppy periods would be occurring within the context of an ongoing bull market.
Thought For The Day:
Eighty percent of success is showing up. -Woody Allen
Current Market Drivers
We strive to identify the driving forces behind the market action on a daily basis. The thinking is that if we can both identify and understand why stocks are doing what they are doing on a short-term basis; we are not likely to be surprised/blind-sided by a big move. Listed below are what we believe to be the driving forces of the current market (Listed in order of importance).
1. The State of the U.S. Economy
2. The State of Trump Administration Policies
3. The State of the Fed's Next Move
4. The State of Global Central Bank Policies (Think ECB pulling back on QE)
Wishing you green screens and all the best for a great day,
David D. Moenning
Chief Investment Officer
Sowell Management Services
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The opinions and forecasts expressed herein are those of Mr. David Moenning and may not actually come to pass. Mr. Moenning's opinions and viewpoints regarding the future of the markets should not be construed as recommendations. The analysis and information in this report is for informational purposes only. No part of the material presented in this report is intended as an investment recommendation or investment advice. Neither the information nor any opinion expressed constitutes a solicitation to purchase or sell securities or any investment program.
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