Zigzagging Higher

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Wednesday’s good news in form of a better than expected durable goods report was overshadowed by a rebound in oil prices causing continued worries about the impact on consumers.

Nevertheless, the major indexes managed a decent afternoon rebound, despite the financials being a big drag. This was caused by an analyst’s opinion that AIG’s recent $20 billion raise in capital may not be sufficient and that the insurer’s financial position could worsen.

That’s not surprising to me, since I believe that the fallout from the real estate/credit bubble, and the fact that many investment banks are still stuck with worthless, leveraged holdings, has not fully played out yet.

Be that as it may, yesterday’s activity affected our Trend Tracking Indexes (TTIs) positively, and they improved slightly:

Domestic TTI: +1.20%
International TTI: -3.01%

A fact is that prices tend to decline faster than they rise. If the markets decide to resume the previous upward trend, chances are that it will take a lot longer than the 5-day drubbing the major indexes took last week.

However, since we don’t control those factors, we will focus only on what we can control, which are our sell stop points. Yesterday’s activity had no effect, and we will hold all positions.

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