Where are the Bigs?

The futures this morning are negative along with the DAX indicating a down open. The market conditions scans are still showing a weak positive bias, indicating weak follow through if any. The market bias indicators are showing some statistical evidence for a correction, but still weak. The combination of market condition, market bias and futures suggest another choppy sideways day.

The markets need the participation of the institutional investors to continue to move up bullishly. In the past, these Big Investors are generally engaged in quiet accumulation during the month of August and can be detected by watching patterns in the volume related indicators such as TSV, BOP, Accumulation/Distribution, Moneystream and Money Flow. So far the indicators are pointing to small fund manager activity as opposed to the large institutional investors. Until we see their footprints in the market, we will likely continue to see this choppy sideways action. As the smaller funds become fully invested, we could also begin to see the markets drift down in a correction. However, it is unlikely we will see a drop to the March lows as this has never happened in the past. Of course, if there was another huge catalyst like the credit crisis, who knows? What distinguishes the current market from any other is the intervention by central banks to keep interest rates artificially low. Most consumers continue to pay high rates while the banks make money on the extremely low rates and trading foreign currency or credit swaps. Maybe that is where all the “Bigs” are – trading Forex.

So remain cautious in your trades. Look for solid chart patterns, be nimble and look for companies with good fundamentals.

We still have ½ our position in NTAP, as we took profits at 5%. We are holding the other ½ to see if the stock has some more potential, but are prepared to exit at any time if the markets turn.

Index	Change	%Change	Level	Phase
TSX	+44.01	+0.40%	10977.97	Bullish
DJIA	-36.43	-0.38%	9544.20	Bullish
Nasdaq	+1.04	+0.05%	2028.77	Bullish
SP 500	-2.05	-0.20%	1028.93	Bullish
Russell 2000	-3.91	-0.67%	579.86	Bullish
NYSE	-13.27	-0.20%	6709.04	Bullish

Source: Telechart

Short Term market outlook:

Bias: Scans showing a positive bias

Energy: weak

Primary Trend: sideways

Sector	Phase
Consumer Staples	Bullish
Healthcare	Bullish
Technology	Bullish
Utilities	Bullish
Energy	Bullish
Financials	Bullish
Industrials	Bullish
Materials	Bullish
Consumer Discretionary	Bullish

Source: Telechart