SmarTrend Weekly Update
Last week was a bit of a transition week as the number of stock in a Downtrend, surpassed the number of stocks in an Uptrend. Just over 47% of stocks in our global portfolio are now in an Uptrend, down from 53% in the prior week. The number of our Uptrends calls that are profitable has ticked up from 75% to 81% suggesting investors are still hanging on and rewarding some of their best winners. The performance of Downtrends has declined which is typical during periods of distribution as institutional investors lighten up but are then briefly lifted by retail investors. We've seen up days in the market accompanied by low volume and down days in the market occurring on higher volume. This is a theme that often implies a shift of equities from stronger hands to weaker ones. We expect the market to continue to test its upper bound (~ 1100 S&P) and will be watching for higher lows on any future retracements to confirm that the intermediate uptrend remains intact. In order to break above resistance on meaningful volume, we will need to see far more Uptrends vs. Downtrends each day - something we did not receive last week. If and when this occurs, readers of our Morning Call newsletter will be among the first to find out.
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