Given the relative position of our TE Index Indicators we would expect more choppiness in the couple of weeks ahead. The primary argument for such a position is the relative weakness in the US 30 year bond. In fact, the yield on the long bond has climbed from a low of around 4.10% to a recent high of close to 4.70%. This is a rather demonstrative move higher and would issue a warning that Asset Allocation managers may begin to allocate more funds to the relative safety of the US Government Bond Market then risk it in a fragile US Equity Market. Countering this, however, is the extreme pessimism amongst Investment Advisors in some of the published reports we follow such as "Investors Intelligence". In the vast majority of cases, when investment counselors get as bearish as they are now the stock markets tend to rally over at least the short to medium term. However, after a descent rally, they often change their positions quickly and become more bullish, which sets the market up for more retrenchment in the weeks following.
Sincerely,
Anthony Waller
President
Teabull Asset Timer Ltd
www.timingequity.com
