Written by Gary

Premarkets were down -0.4% and didn’t change significantly after the US financial ‘good’ news this morning. Markets opened down as expected and immediately began to climb upwards on moderate volume gaining fractionally.

By 10 am the averages were mixed with the small caps flat and in the green as volume falls. US Markit US Manufacturing PMI is down and US Existing Home Sales are up and the averages reacted positively to these reports.

FoxNews reported, “The Labor Department reports consumer price inflation held steady in October, while economists expected to slip slightly for the month. Excluding the food and energy components, prices rose a seasonally 0.2%. Wall Street had forecast overall costs would fall 0.1%.

The number of Americans filing for first-time unemployment benefits fell last week to 291,000 from 293,000 the week prior. Economists had expected claims dipping to 285,000 last week.”

The first column is what was reported this morning. The second column is what was expected and the third is the last report.

Our medium term indicators are leaning towards sell portfolio of non-performers at the opening and the short-term market direction meter is bullish. We remain mostly conservatively bullish, neutral in other words. Right now now I am getting very concerned any downtrend could get very aggressive in the short-term and volatility may also promote sudden reversals. The SP500 MACD has turned flat, but remains above zero at 23.93. I would advise caution in taking any position during this uncertain period and I hope you have returned your ‘dogs’ to the pound.

Having some cash on hand now is not a bad strategy as market changes are happening everyday. As of now, I do not see any leading indicators that are warning of a ‘long-term’ reversal in the near-term. There may be one later in 2015, but any market fluctuations we see now are more of a internal market rectification than a bear market.