SPY On The New High- August 15th, 2020

The US markets closed higher on the week with the SPY ETF breaking out to all time highs. With all of my breadth data, almost everything is positive here. My SSIH indicator drifted lower with the weakness in gold and a few other areas to 95.8 %. I hear all the noise around me about divergences but the price and momentum action continue to say higher.

Last week I mentioned “Bonds made a very important hammer candle this week giving some reasons to be be bullish the banks. The Bank ETF was up on the week nicely. This bond hammer follows last week’s Fed meeting,
so this is a bullish time to look for changes.” Well, this week, bond yields soared. It was a massive change that bodes well for financials.

Oil names were strong this week with oil making a higher high. Natgas, gasoline and heating oil all worked higher. Industrials, transports, and autos all worked higher. I was watching for copper to get back in sync with everything moving higher. That did happen with copper moving up nicely this week. Commodities did well except for precious metals, down 5%.

China, Japan, South Korea all moved higher. The move higher was global for the most part, but Canada, Brazil and India slipped a bit. In the picture above, I saw a couple of bucks standing near my path. We continue to see fresh breakouts in different groups adding a couple of bucks to the portfolio. Still a nice investing climate.

Summary: The US market keeps working its way higher. The Canadian market stalled up against resistance, but it looks like the commodities and the banks could move up this week, which should give it the momentum to go higher. Almost every chart in breadth (number of stocks participating in the rally) is near the top right corner. Examples of positive breadth include the advance/decline lines and bullish percent indexes holding up nicely. Gold’s bullish percent slipped this week as gold fell 5%.

Let’s jump into the charts.