The S&P 500 closed on a new high again. Almost all the sectors had a good week with most making fresh highs. I really like the mega-cap tech names here. They are running higher. The market of stocks looks set to continue the uptrend.
As I mentioned, almost all the US sectors are hitting new highs, but Europe is also hitting new highs. Australia finally got out of bed and joined the party this week. Asia was down slightly (less than a percent) for the most part.
Remarkably the currencies had the USD moving lower, but commodities did not rally significantly. Commodity related stocks were down or marginally up. EEM – emerging markets – did break down below the trend line and close there. CEW – emerging market currencies – dropped and closed near the lows. This is typically directionally related to commodities. Why the weakness in commodities? I don’t have a good answer, but they might just need time to relax after a stellar 6 months.
It’s all makes for a pretty bullish view. It does feel a little exuberant but when indexes are tagging new highs worldwide, it is bullish. As we get very bullish, I usually get cautionary, but few charts are yelling caution. One example would be more stocks declining big (greater than 5%) than rising (greater than 5%). Considering how big the indexes were up, with the strength of the mega-cap names, it was odd to see big decliners slightly outpace big gainers. Is that being too fussy?
I would suggest it’s open water ahead until something changes.
Summary: The $SPX has made three higher weekly closes in a row. All the sectors are participating with the exception of energy so far. With tech, communications services, and consumer discretionary leading the party, I have trouble arguing. The rally is under way. I won’t let a weak Monday or Tuesday wear me out. I plan to use a weak day to find more trades until proven wrong.
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