S&P New High
Well, I've been saying that we will probably see new year highs in our stock market and that's what happened today as the S&P made a new year high.
In the lower pane is a relative strength line of the S&P vs the Dow Jones World Index. As you can see this ratio line is trending down indicating that our market is weaker than the rest of the world markets, and that is why I referred to our market 2 weeks ago as a lagging market.
One of groups I've been watching very carefully were the financial stocks. These stocks have been very weak and that is one of the reasons why I didn't get long our stock market a few weeks ago even though I said we will make new year highs.
Today the financial stocks were the strongest stocks in the market! Banks, brokers, lenders all had nice moves up today. If they can continue to rally, that will be a big plus for the bulls.
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3 comments:
Kevin
Any opinion yet regarding this breakout with a lagging participation of brokers, financials, home, and reits ?
Kevin,
from my experience every market needs a healthy 50% correction before it move forward in a healthy fashion. A .618 move tells me that there is something bad to come. Look at 1987, very similiar pattern in the decinal cycle. THe Dax looks to be the lead indicator on the US indices. Soon as that corrects which should be soon, hello 1350 (I hope)
Hi Trs,
I'm not buying this breakout.. I might be looking to short but I'm not doing anything at the moment.
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