Lead by the NASDAQ stocks encounter sellers in the final hour selling off into the close. Gains were still solid on the day as the Russell 2000 led all gainers with a 1.03% gain. S&P 500 closed with gains of .62% gain brining up the rear for the major market indexes. On the surface the selling in the last hour didn’t do too much damage to the overall uptrend with many stocks like TSLA hitting new highs. Utilities were a drag while Oil and Gas led the way for the S&P 500. Financials came in a healthy second with the group up 1% on the day. Financials have been laggards as of late. All-in-all not a terrible day, but we remain in our uptrend.
Many will point to the overbought conditions we see in the market. 77% of stocks are above their 20 day moving average with nearly 70% are above their respective 50 day moving average. Despite other oscillators indicating overbought conditions it does not mean this market is ready to roll over either. Conditions as such can continue for much longer than anyone would expect. Same goes for oversold conditions too. This market can and will outsmart many especially for those who tend to think they are smarter than the market.
It will be interesting to see how the NASDAQ reacts here. After 4290 and 4500 there isn’t much resistance until we see its all-time high set way back on March 10th, 2010. How many in the market now where around then? Regardless, breaking into new all-time highs is pretty significant and while we are a little ways away from it on the NASDAQ it is something to be aware of. Just check out with the S&P 500 did after it cleared its old 2007 high? Sure, in 2007 it cleared its 2000 high and proceeded to drop more than 50%, but typically a fresh new all-time high is a very bullish occurrence.
The trend is still in our favor and we’ll continue to stay on this path until the market gives us reason otherwise. Stick to the plan and ride those winners.
