We entered a downtrend on March 10th, but we have had enough positive market action over the last week to finally shift the market into a new uptrend yesterday Tuesday March 29th. The market shook off downbeat headlines yesterday as consumer confidence (data from the Conference Board) fell more than expected, hurt by higher food and fuel prices and concerns about the job market. The Conference Board’s chief economist said that this “will likely impact spending decisions.” What is important is not what economists like her are saying but rather what the market is saying, and the market is now saying (through my models) that it is in an uptrend. Act by it until we enter a new downtrend again. But use caution despite the new uptrend. Buy only the top stocks in the best industry groups as close as possible to proper buy points. Control your exposure by scaling into positions as a stock moves in your favor.
The Case-Shiller home price index was another data point that turned in its worst one-month performance in a year. The 20-city gauge fell 3.1% between January and February. “The housing market recession is not yet over,” the head of the committee at S&P said. Just wanted to remind you that the fundamentals still do not look good for the housing market.
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