Outside of the Dow’s loss the market was relatively quiet pricewise as the prior two day’s worth of gains are digested. We did get a few breakdowns from NUS, HLF, and BBY. However, the overall market settled nicely into a tighter than normal day’s range. Volume was quiet on both major exchanges today even with bank earnings driving volume. We continue to see more breakouts from potential new leaders a very positive sign for this uptrend. Tomorrow we’ll get some crazy volume figures from options expiry, but look for signs of healthy price action especially in the market leaders. The market just gave us another positive day for this uptrend with Small Cap stocks leading the way and more earnings for the market to digest.
A big argument we continue to see is whether or not we are in a bubble in stocks. The main argument we aren’t in a bubble is we have yet to see Joe Public trading stocks like we saw in the late 90s. Let’s not forget we didn’t have the same level of Joe Public in the 2007 top like we did in 2000, but we did have Joe Public trading stocks. Perhaps many of those were trying to make and lose a fortune in Real Estate and ultimately being the catalyst for the stock market crash of 2008 into 2009. Fast forward today and the only place that looks remotely bubblish would be the Federal Reserve’s balance sheet. Since the Federal Reserve can create money through various forms can their balance sheet contract? I am sure someone can find a scenario, but it isn’t worth it. Follow the price action and stick to the system. Everything else is simply noise.
Over the last few weeks we have seen the 10 year treasury notes inch higher with the market. Using TLT as a guide it does appear we may see the trend change in the 10 year? Let’s go to a traditional P&F chart to see what we have?
The downside objective has been met, will it in time breakout? It should be interesting how this plays out over the next couple of weeks.
Make sure you get out and enjoy the weekend. It is important everyone gets out and enjoys themselves even if it is cold! Life is meant to be enjoyed not passed by! Stay on those winners and shed your losers. Have a great weekend and we’ll see you next week.
