Weekly Wrap. Markets rebound. Optimism returns.QQQ (Nasdaq) is...

Weekly Wrap. Markets rebound. Optimism returns.

QQQ (Nasdaq) is in a strong up-trend travelling above the higher edge of my short-term Bollinger Bands (10/0.8).

All indicators are bullish. What's not to like?

Dow Jones

Dow Jones is similar to the QQQ. It is in a strong up trend and all indicators are bullish.

STW tracking ETF for the XJO

Broken record time. STW (XJO) is bullish similar to QQQ and Dow Jones

ASX Sector Performance

Some extra-ordinary returns in sectors this week with the XJO up +2.49%.

Great returns occurred in growth sectors of the market. Best was Technology (XIJ) up +6.02%. That was followed by Discretionary +5.28% and Financials +4.77%.

The only negative sectors were Materials -1.26%. Utilities -2.32%

Utilities Sector fell heavily on Thursday as a result of a poor report from Origin. Origin fell -9,72% on Thursday.

Utilities is a relatively small sector and a big drop in one large stock can have an out-sized effect on the sector.

Materials continues to suffer from more prices from iron ore and lithium.

Overall, however, the sector results were bullish.

Cautionary Note.

While all that market effort comes through in the above bullish charts, one of my main indicators turned bearish this week. That's the Long Term Investor Index.

The 10-Day Moving Average of New Highs minus New Lows crossed below its zero line this week. That's a sign to go defensive for long-term investors.

This is a lagging indicator and is probably a reflection of the big pull-back which occurred prior to the current week.

Taken in context, we might like to ignore that bearish reading as it has occurred in a rising market. That often suggests that it is a false break-down. Just don't discount it completely. NH-NL has given good service in the past but is often late to the party. A sudden shock to the system might keep this metric in negative territory.

Don't forget that the Jackson Hole Economic Symposium comes this week. Jay Powell, head of the Federal Reserve, is due to speak on Friday.

The recent pull-back was caused by negative sentiment in the U.S. with suspicions that a recession could be looming. If employment figures continue to deteriorate, that's still a possibility.

Take care.