Sunday, August 31, 2008

Money Flow Update for August 31st

Stocks tried to mount a rally this past week, only to fall back on Friday. We saw a bounce in four-day money flow (pink line above), but note that we once again remained below the zero line, as more dollars were flowing out of Dow stocks than into them. This fits with the recent sector review, which found evidence of sector rotation during the past week--not sustained strength across market sectors. Until we see greater evidence of sector strength and money flows, I will be viewing the recent market bounce as a countertrend rally in a broader bear market.