The bears failed in their attempt to close the bullish gap, and stocks were rising as they went into the ISM non-manufacturing PMI. The reading outperformed expectations, and stocks didn't sell off in its aftermath.

Importantly, high yield corporate debt (HYG ETF) opened with a bullish gap, and has been adding to its gains, while the investment grade debt (LQD ETF) was close to unchanged. After the incoming data, the HYG ETF hasn't really strengthened, and as the www.stockcharts.com data show, has actually retreated from its intraday highs.

This means that the pendulum is ready to swing the other way, and our open short position remains justified.

Thank you.

Monica Kingsley
Stock Trading Strategist
Sunshine Profits - Effective Investments through Diligence and Care