Positive Sentiment Prevails as Economic Data Spurs Bulls and Markets Higher

The positive numbers for retail sales and PPI helped the markets to continue with its bullish run.  Bernake has stated that the recession is over in the United States although it may not be apparent to “Main Street” for some time yet.  The positive sentiment in the US fed the Canadian markets which also experienced a bullish day. 

How long will this continue?  Afraid you are missing the party?  Statistically, it would be nice to see a pullback or some resting time.  As I indicated before, I prefer to buy on pullbacks at a support level.  The markets have been running for eight days now and looking at the recent runs on the charts, we may be going for another 10 day run before the markets pull back.  On a statistical basis, the markets rarely run this long.  As such, we continue to get statistical sell signals from the market bias indicators.  The market condition scans on the other hand continue to show a positive bias with underlying accumulation by the institutions.  When the big players are buying, this provides the fuel necessary for the markets to continue up.  However, because one of the premises I like to consider in my market evaluation is reversion to mean, I will continue to be cautious with taking on additional positions as this run continues.  At the same time, as the tables below indicate, my overall stance on the market remains bullish. 

The stock selection scans I prefer to use are showing fewer and fewer possibilities with charts that are not ideal, which is also making me cautious.  Opportunities abound, and I will remain patient.

This week is also the anniversary of the collapse of Lehman Brothers, which was the “straw that broke the camel’s back” plunging the markets into a financial crisis and the world economies into a global recession.   Now it appears we are emerging from the recession in North America.

Futures are positive this morning along with the DAX, indicating an up open.

Index	Change	%Change	Level	Phase
TSX	+163.79	+1.45%	11495.83	Bullish
DJIA	+56.61	+0.59%	9683.41	Bullish
Nasdaq	+10.86	+0.52%	2102.64	Bullish
SP 500	+3.29	+0.31%	1052.63	Bullish
Russell 2000	+4.81	+0.80%	604.84	Bullish
NYSE	+37.08	+0.54%	6917.07	Bullish

Source: Telechart

Short Term market outlook:

Bias: Scans showing a positive bias

Energy: moderate

 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