Trade falls as stocks rise hitting new 52 week highs. The big story of the day was the S&P 500 regaining the same level when Lehman Brothers collapsed. It is hard to believe it has taken over two years to recapture the same levels, but it has been the Federal Reserve printing money rather than robust economic growth pushing the market higher. However, it is hard to argue with the gains we continue to see from the market and today was no exception. With a few leading stocks pushing higher this market remains in an uptrend and we continue to ride it higher.
Tomorrow we’ll see GDP numbers for the third quarter along with Personal Consumption. It’ll be interesting to see the government adjust their figures, but barring a huge shift in the number the market will more than likely shrug off the news. End of December tends to be bullish for stocks, much like last year we have set up to run into the new year on new highs rather than a weak market. This despite all the overbought and complacent signals we have been witness to this market continues to ignore it. In addition, we have USA Today telling its readers it is time to get back into stocks. No top just yet.
The correlation between stocks and the overall market continue to be at record highs and not to mention sentiment continues to run at maximum levels. However, these aren’t precise indicators of an EXACT market top. In fact, we have yet to see stocks run in parabolic fashion to indicate a top. In spring of 2008 we had plenty of natural resource stocks catapult in just a month’s time. So far, we have yet to see these parabolic type moves. Could we, yes, but they have yet to show themselves to us just yet. The Federal Reserve’s POMO continues to help keep support in the market and until the operation ceases the stock market will have an artificial floor.
Keep your eyes on the prize and that is leading stocks. Yesterday I mentioned NFLX as a leading stock that had pulled back to its 50dma bounced today in modest volume. It was nice to see support come into the stock at this key moving average. A follow through on today’s action is needed and would be welcomed. Other leaders broke out today; we have one as a new long. Stick with the leaders.
