The first half of July’s strong seasonal performance is now behind us. My indicators don’t show a great buying point in any time frame.
If there isn’t some dramatic solution to the weak breadth we’ve seen in the market recently, this rally is nearing its conclusion. July isn’t typically too bad of a month, but August can be.
In Summary, many indicators are neutral or slightly overbought meaning this is not an outstanding time to buy; nor is it a terrible time to buy. The summertime is typically low volume and trends prevail until something disturbs the trend. VIX is not at historic lows meaning it could potentially fall further.
Overall my indicators are giving mixed signals. In spite of a 4% S&P rally, the medium term indicator hasn’t really moved up. Today and yesterday the ultra short term indicator declined indicating some loss of breadth into the increase.
Seasonality is beginning to work against stocks with half of May and June ahead. The rate of this sell-off has been steep and unanticipated by me. That said, the VIX is not seeming to show much panic. So either that is to come soon, or we’re close to a short term bottom.
The rally that began on Christmas eve is starting to age. However, with April typically one of the best months of the year, I don’t think it’s time to roll over has arrived just yet. Probably have to wait for some maturation and flat/topping/rolling over action to take place over the next 2-3 weeks.