Blog Post On: 5/16/2010

The turmoil in Greece and Spain really weighed heavy on the markets and it appears that Decision Economics (DE) has also turned negative in the short term.

DE stated in the Friday 5/7 report "DE has turned tactically negative on U.S. and global equities as a correction continues due to short term sovereign debt issues."  DE maintains a... "long-term strategic overweight on U.S. equities...strong V shaped earnings growth projections."   So in other words the short term ride is going to be rough but longer term the outlook is much better. DE goes on to talk about the U.S. exports can be hurt by the sovereign debt issues as well. 

Stock Market Timing Model (MTR-TM): Market Down Signal on 5/6/2010

• MTR-I:  Week over week (wow) +4.68. This comes from a sharp move up. The MTR-TM forecasts a Market Up signal for Monday 5/17 if the MTR-TM increases by +4.16%. Caution is key at this point due to factors noted above as well as seasonal "sell in May" issues.
• RSI: 45.58 and turned down after hitting 50. Below 50 is negative and a turn down from 50 can be see as negative as well. 
• MACD:  -7.51, below zero is a negative for the markets.
  Volume: Friday was clearly a distribution day

Advance/Decline Lines just stopping over major support levels.

 

All the major indexes are close to major support levels. Touching these levels may bring about a short term bounce higher.