On December 20th IBD posted in their Big Picture that the market was in a confirmed uptrend.
IBD also noted that investors should proceed with caution since several leaders had broken down with this uptrend. Additionally the market has been trading sideways for such an extended period of time that it’s likely to find some resistance.
Two days later here is IBD’s big picture.
The market has historically had low volume around the holiday season and there is no difference with this one. However, with such light volume if institutions come back in they could easily destroy the small profits the market has cut out.
So will this uptrend be the one to pull us out of this sideways market? I certainly hope so but other indicators haven’t confirmed IBD’s uptrend yet so the safest place is still in cash.
So what other indicators are good to use? Stockcharts.com $NAHL index has accurately captured large up trends and down trends. This indicator would have kept you out over the last few months sideways move and it’s my primary indicator.
New Highs / New Lows 12/22/2011
As long as the moving average (1) says bellow the exponential moving average (10) the best place to be is in cash.