Trending Higher?

     Based on overseas action and US futures, the bulls are looking to extend yesterday’s gains.  Following a day in which prior laggards (financials/retail) rallied and prior leaders faded (technology), we need to see if this rally is sustainable.  Given yesterday’s divergence, one could believe yesterday was a short-covering rally.  I am of the view that it is more sustainable.  As I have said for the past three days, the S&P 500 and DJIA finally traded below fair value and offered an excellent entry point.  At the same time, I continue to view the NASDAQ as overvalued.  Therefore, I continue to put money to work where I see value and stay short where value does not exist.  Doing so will allow me to profit in a difficult market.

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