Zacks’ Voice of the People Highlights user OnIslandTrader: “A Breadthless Advance” from the People & Picks community.
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A Breadthless Advance
Although the market has recovered — thanks largely to Thursday’s huge rally — the internals remain ugly. We hoped we would be comfortable removing the hedge when we pushed above the 111 mark on the SPDR S&P 500 ETF (SPY) but we remain firmly hesitant to do so at this point.
Unlike the previous corrections in this rally, breadth is missing-in-action and makes us question the validity of last week’s run.
We like to be aggressively long when the High-Low indicators are on the rise. The rest of the time it is best to play the market defensively.
Although price action suggests the hedge should soon be removed, we won’t do so until we see at least the beginning of a new uptrend in the point & figure chart of the NYSE BPI (a new column of Xs formed to the right of the current column of Os). We also want to see the High-Low indicators start climbing again, but we may remove the hedge before then if other breadth indicators strengthen enough to warrant it.
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