Weekly Report

We still believe a rally into the end of the year is likely, as the current oversold readings support a seasonal advance.  There are some real signs of rotation in the market but nothing that prevents our yearend rally scenario.

The McClellan Oscillator, one of my favorite short-term indicators has turned up from a low level.  Daily stochastics on SPY and QQQ are now oversold and in position to turn up in buy recycles.

SPY should hold 660 to 650 if we are going to be right about our rally scenario.  Watch Value stocks as they should start to show even more relative strength.  Our contention is that the Dollar is a bullish pattern, and that a move back above 100 could be the signal for the start of a new rally.

We don’t have any changes to our equity market outlook, so I we can have a little bit of fun in this piece.