an tSionna {01.09.12}

Chart of the S&P 500 ETF Spyder trust-SPY.  While it may not feel like it to most of us given the fact that there was so much churning around last year, the index has actually been in a bullish mode since it bottomed out last summer.  In fact SPY is up over 13% since it bottomed back in the first of October and is up over 6% since Mid-December. 

The fact that the market has entered a previous level of congestion from where it's had trouble advancing and the fact that it is now overbought in nearly every time frame we measure suggest the probability of at least a pause or a slight pullback in this current advance.  On the other side of this argument would be the seasonal factors currently at play as January is typically a strong month for stocks.  We will let our indicators be our guide and watch to see how this develops in the next few weeks.  I think though {for reasons that I'll detail in the next few weeks and also based on what we currently know} that pullbacks in the market are better to be bought in the next few months than to be sold. 

However given the move we've had and the nature of the markets at this juncture we will move our shortest term indicator down a notch to Net Market Neutral.  We have been Net Market Positive on the markets short term since October 6, 2011 . Please go here for a definition of what these terms mean.  Please also note that this change only reflects our thinking to our shortest term indicator and that both are intermediate and longer term indicators are still Net Market Positive.  This also currently reflects that we are pretty fully invested for clients at this time.  It does not necessarily mean that we are sellers here or that we have developed a negative view of the markets.