Although there was strong buying on Friday, the indexes are having a hard time getting up through the T-line Tuesday. The Dow, S&P 500, and the NASDAQ, after trading higher on the open, is now trading back below the T-line. A close below the T line today would indicate the sideways mode of the market with a slow drift, probably back down to the 200 day moving average. That scenario still warrants having both long and short positions in the portfolio.
Friday’s positive trading in the markets does not show anything that would be changing investor sentiment, merely some buying/short covering in a down trending market. There is a perceived trend channel in progress, indicating the slow down trending/sideways moving market. This continues to allow scanning strong and weak sectors/stocks on an individual basis.