Monthly Report

We rate sentiment POSITIVE here because the intermediate sentiment indicator has started to advance and Put/Call is showing a surprising resurgence in bearishness (a contrarian signal). Sentiment is set up for an advance. The intermediate picture is improving.

GLD could double bottom in the 400-area, maybe on a false breakdown of 400. Watch this carefully, we may end up moving to a buy on GLD.

Oil and Gasoline have had huge rallies because of Iran. Watch oil via USO, UGA and DBC carefully. The oil stocks have broken out. Oil Stock ETFs are through resistance, but they hit price targets and are weakening now.

We believe we are close to an intermediate bottom, likely in late April/early May.

We are overweight XLI and XLU. These have strong accumulation models and intermediate charts are better than most of the sectors. Indeed, both hit all- time highs.

It still looks like a decline in the first part of the year and a strong end to 2026. We are cautious, as the average decline in a midterm election year is around 18%.

Equities had a yearend rally. Key indexes such as Transportations showed strong improvement in December, suggesting the possibility that these could advance. We are a bit surprised that the market is broadening out – but this is bullish now and could bode well for 2026.

Breadth has improved in the last week or so – we had a Zweig breadth in April and could see another one in the next five days.

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