Short Term

Reflecting action in client accounts we will move our shortest term indicators up to Net Market Positive.  We intimated that we might make this change last week.  You can go here  for  a definition of this term.  

I will add a caveat to both of my recent indicator changes.  My upgrades are predicated on what my money flow indicators are showing.   However, money flow analysis is just one portion of the investment matrix.  The other indicators are market ratings, valuation and fundamental analysis.  All of these have also moved to levels where probability suggests markets have the potential to rally.  This however is based on a common perception among investors that somehow the fiscal cliff will be averted.  This is the dominant belief on Wall Street after Friday's meeting between congressional leaders and the President.  The one thing that is bothering me is that often times the most common perception is wrong.  

I'm changing my indicators largely based on what we have recently done for clients.  I will let you know in advance that I will call an audible and change these ratings if it begins to look like the powers in Washington can't climb above politics and fix this thing.  

By the way I am dubious that a complete solution can be found in the "Lame Duck" session.  I think a patch will be  put in place in effect giving Washington perhaps six-nine months to come up with a permanent fix.  That's not a deal killer in my book.  It is the reality of how things work in Washington.