This PMO index tells me that the short-term trend is weakening. So we are looking for signs that a short-term downtrend has started. (The short-term trend gives you about nine buying opportunities per year.)

The market broke higher after the French election. But since then, the SPX equal weight has traded within this box.

If I only had this chart available to tell me where the market is headed, then I would have to say that prices are headed higher. Or, more accurately, I would say that the I am assuming higher prices because the most recent signal is bullish, and, in addition, prices are trading above the 50-day.

However, these elevated levels of new 52-week lows indicate some selling pressure is developing behind the scenes. The market is vulnerable when new lows start to pick up, and, at the same time, the major indexes are challenging new price highs.

What is really going on here? Are people buying the semiconductors because they believe in this group or because they are fleeing other areas of the market? Are the bulls hiding out in this group, or trying to profit from every last opportunity until they finally throw in the towel on the general market?

I like to be a seller, not a buyer, into a run up like this.

I am probably the last person on the planet to finally admit that the US Dollar is headed lower. This is a decisive looking break of the uptrend, although there is some decent looking support under the current price dating back to 2016.

The combination of a weak US Dollar and an extended looking stock market does not give me a lot of confidence to be a buyer of US stocks.

The Leader List

This list hasn't changed since yesterday. The leaders are just getting stronger while the rest of the market looks weak.

Home Builders look like they want to re-join the leaders. If the general market continues to hold up, this group could break out of a solid looking base.

Outlook

The Value Line Survey is cautious towards the market due to high stock valuations.

The long-term outlook is positive.
The medium-term trend is looking vulnerable.
The short-term trend is up as of April-20. Looking for signs of the next short-term downtrend.