It was an up week for the S&P 500 last week. The S&P 500 finished up at .54% again putting the S&P 500 on new highs. The action was not quite as strong as last week as there was some selling on Friday to close the S&P 500 off the traded highs. The best bull bars close on their highs.
The MSCI All World (ex USA) Index also finished up about a half percent, right at .53 percent. The action with the MSCI All World was slightly weaker as it gave up about half of the total gains from earlier in the week.
When we compare the S&P 500 and MSCI All World Index, they are about neck and neck when we look at the last 12-months. We really want to see how price closes this month, but as it stands right now, the All World Index is the winner in our eyes when we look at the actual vehicles traded. Market breadth has strengthened into overbought territory. The past several times breadth has breached this range, the markets have paused or pulled back. So, I’d have to say the risk of a sideways or down week is a little higher than normal.
It could be a volatile week if only for the economic data on the schedule. PMI, New Home Sales, FOMC Meeting Announcement, and GDP is all coming up this week. The FOMC is expected to hold the federal funds target the same at 1.00 to 1.25…there are no expectations of a rate hike. Anything different would be a surprise to almost everyone’s prediction.
The buy trigger went off in the Japan Index so it was a new addition to a swing position. With the others, we are still pretty far off from any stop trigger points on the vehicles we like.
Overall, the long-term trend of the S&P 500 is still higher as well as the shorter-term. We are watching this week to see if the markets can continue to advance higher into the top of their respective channels or if we see the possible wedge pattern play out into a pause or possible pull back in the markets.
by Adam Straseske, CMT
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