The dip this morning down to SPX 4450 was perfect for setting up trades but it didn’t last very long. Buyers are looking for any dips to get capital back working that was taken out just two weeks earlier when it looked like the market was about to test the 200 day moving average. If that had happened, it would have been the biggest decline for the past 12 months. Instead the correction turned out to be a typical pull back in an ongoing bull market.
Consumers are still spending and early indications are that the Black Friday to Christmas period will see a rise in spending. News that home-builders remain optimistic is another footing that rally is using to push higher.
With most of the losses now recovered from the recent pullback, the earnings this week are probably enough to push the index back to its all-time highs.
New York Stats:
Volume is still a little light at just 1.7 billion shares traded on New York. Advancers are slightly ahead of decliners but there are 115 new highs and just 40 new lows which is bullish.
Volume is 51% to the upside and 49% to the downside so a real tug-of-war going on there.
NASDAQ Stats:
Volume is better on the NASDAQ at 2.2 billion shares as of 12:30.
However new lows are still outpacing new highs, which is never a great sign for the bulls. There are 104 new lows and 77 new highs.
However of the volume 67% is to the upside while only 32% is to the downside. 49% of all stocks are falling while just 41% are rising. That means a lot of money is flowing into the same names, like Microsoft, Oracle, Facebook, Fortinet, O’Reilly, Paychex and others. This means the NASDAQ is advancing but it is a narrow advance. It needs to broaden to break through 15000 and keep climbing.
Outlook:
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