Despite a bounce in the major averages yesterday, the market remains in no-man's land and is churning away. Given all the headwinds I discussed here tirelessly I think the direction of stock prices over the next two months is flat to down.  As such we are increasing our focus on shorter-term trading in Bucket 1 and the shorter part of Bucket 2.  As the market in our opinion should remain acting choppy for thei foreseable future we will pay close attention to short.-term investor sentiment via the use of candlestick analysis.  

Yesterday's action left all the major U.S. indices below their 50 dma, which however we don't find nearly as telling as the shorter-term broken bull patterns.  

The Russell 2000 small cap index for example remains looking weak after having developed a topping pattern that is in the process of reaching our target near $770.

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