The S&P 500 snapped up .85% for the week closing at all-time new highs as the bull train continues. The price action remains bullish until one of three things happen. The first, the S&P 500 breaks below the 2860 range. The second, price breaks below the current bull channel. Thirdly, price breaks above the channel line which would signal euphoria and would not be sustainable for a meaningful amount of time without at least a pause in upside action.
12-month momentum is still skewed towards the S&P 500. International markets did have a good week, but on the longer-term we still want to focus on the US. We are close to an actionable item with regards to momentum. US Large Caps have gained the edge over US Small Caps. However, we wait for the signal to close at the end of the month before taking action. So…if the relationship remains the same and closes September like this, we take action and rotate into Large Caps. The bear ‘o’ meter remains risk on.
We did get a sell signal in some of the US equities positions, but overall they still look bullish. Our treasury position is starting the week once again on support. Each time I think it is going to break to the downside and it bounces. I believe once again it will break support and we will be stopped out, but we will watch closely to see if in fact that does happen. The commodities positions of Natural Gas and Global Wind Energy advanced nicely. They are still within their respective trading ranges.
We are not looking to add any new positions this week. We may however adjust some stops up to take some risk off the table. Market breadth is signaling a pull back for this week. Don’t know if we’ll see it, but it makes things interesting! Have a great week!
Adam Straseske, CMT