It was a relatively flat week in the S&P 500 as it finished up .15% by Friday with little movement from the start of the week. The S&P 500 is becoming slightly weaker as few stocks participated in the small advance and many ended up declining. We have been in a tight bull channel since mid-August, which is the second strongest type of channel. With that said, if the S&P 500 does decline, I would think the bulls would want to see at least a test of the high before they give up buying the dips.
The S&P 500 and All-World (ex-USA) Index are about as neck and neck as you can get. Depending upon what vehicles you use to measure, one is slightly outpacing the other. In the vehicles that we use, the S&P 500 is lagging slightly…hence the higher concentration in international markets. The big economic news this week are the Housing Start numbers scheduled for release on Wednesday morning.
We are pretty far off of the stops and second purchase areas of almost all positions. The trend is up on the longer-term and shorter-term of the S&P 500 and we are watching closely to see if we get a pullback in prices. Last time we were in this situation a few weeks ago, the S&P 500 broke out to new highs. Many equity markets are certainly crawling the wall of worry right now. All this makes for an interesting week ahead! We have started a YouTube Channel. Check it out and subscribe! We go into more detail about the markets and strategy. Lastly, have a great week and don’t hesitate to call me if you want to talk in more detail about anything!
by Adam Straseske, CMT