Here is a look at the short-term market. Prices are drifting higher off the March 27 low which I think means we are setting up for another short-term leg lower.

The PMO index for the S&P1500 is about 41% of stocks on a buy signal. The trend is up, and it is working its way slowly off the lows. 

41% is far from overbought, but the 10-day put/call is in the sell range so I think that means we are looking for the next short-term top to occur soon.

The short-term trend is bit difficult at the moment, but looking back a few weeks it becomes more apparent. The real challenge is recognizing the trend changes real-time… as they occur.

Now that stockcharts.com is no longer maintaining the !PMOBUYALL index, let’s see how well I can do real-time with the other indicators that they provide.

I don’t like the looks of this chart with the AD line higher and the UD lower. This is not the look you want if you think prices are headed higher.

Bottom Line: In general, I think market breadth is slowly getting weaker even though the overall market remains near the highs. We have all seen this many times before. Plus, the market is probably just getting ready to handle the next round of earnings. The real market action is probably just getting started.

Sector Strength

This spreadsheet represents the relative strength of stocks from a somewhat longer-term perspective. The leader list (not shown today) is a separate spreadsheet. The leader list is now much more short-term oriented where I try to catch the new trends.

In general, I am much more successful being a longer-term buy-and-hold investor. I like to buy into strong longer-term up trends such as QQQ, but I try to do the purchasing during the significant dips.

However, the shorter-term definitely has its place, and it can be very exciting trying to catch those early up trends.

You have to decide for yourself how you define the longer-term versus the short-term trend because I have trouble defining this. In general, I think the length of the trend is defined by the number of buying opportunities it presents.

The longer-term trend provides one or two really good buying opportunities every year, whereas the shorter-term trend provides about nine or ten opportunities to buy each year. Don’t ask me why. It is just what I have observed over time.

What is this spreadsheet telling us?

I see the major indexes skewed to the right indicating a strong uptrend, but also indicating that this is probably not the best time to be a buyer of stocks. 

I also see the foreign ETFs skewed right. That generally indicates global growth and some level of inflation, as well as a relatively weaker US Dollar.

It is a challenge at the moment to figure out whether this strength in foreign ETFs will last because the US Dollar looks to me as though it could be headed higher.