Another Wild Wednesday

My system stayed flat yesterday and today at -1800 and the neutral signal stays on. That is 4 flat days and it is important that we have yet to see an uptick in my system even with the big up day on Monday. Right now there are 3 stocks in an uptrend in the S&P 500, zero stocks in uptrends in both the S&P 100 and Nasdaq 100, 4 in an uptrend in the S&P 400, 9 in an uptrend in the S&P 600, and 3 stocks in an uptrend in my Bank/Tech index. As bad as those numbers are, the bulls refuse to capitalize on these technicals. It is only a matter of time before they do but I'm hedging for possible new lows this week and then looking for another potential bottom next week after expiration. The Yen crosses have turned tail in a big way and the 100 level continues to be a key level for the Dollar/Yen. It currently is at 100 and stops lurk below 98 and the March lows below 96. A move back above 102.30 would suggest a potentially successful re-test. Unless there is an immediate rally that lasts 7-10 days, my view that we would have a 6-9 month bull market is off the table. Instead, my views are being swayed by the inflation/deflation debate. If you believe we are closer to a situation of 1970's style inflation, then the market should bottom this year and there will be a much larger cyclical bull market within this secular bear than I anticipated coming up soon. If you believe America has entered a Japanese style deflation where consumers truly shun credit and become savers, then we are likely only halfway through this cyclical bear with a bottom not coming until 2009 and are in a much longer secular bear than I anticipated. Personally, I believe it is the former and that would mean that commodities will come back into play down the road. Throughout history, when the printing press works overtime like the U.S. is currently doing, inflation has come back to rear its ugly head. I easily could be wrong and if the bottom doesn't occur this quarter then I know I am.