While energy and materials helped the market push higher the NASDAQ 100 names weighed heavily on the NASDAQ. Volume was up across the board today, but continues to remain below average. Technology stocks (XLK) continue their struggles losing 56bps on the session. Consumer discretionary (XLY) names were just in front of technology stocks losing 55bps on the day. It is clear tangible assets are winning the day and they are sure getting a boost from a weaker dollar. The NASDAQ is struggling, but still hanging within its uptrend.
Both the S&P 500 and Dow hit their highest levels in 2016 as commodities continue to push higher. The central banks across the globe have made it clear they want to support equity prices at all costs. The trailing twelve-month price-to-earnings ratio on the S&P 500 is over 19 times. A hefty price to pay, but with all the central bank support there is no telling what will be too expensive. Just follow price and stay disciplined.
There is no telling where this market will go from here, but what we can do is control our own actions. We are still getting buy signals, but this market is extended. Time frames will likely tighten up along with stops. Let’s see where this market takes us.
