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OK, this is starting to get ridiculous. The S&P 500 was up 2.23% for the week. The most the bears could do is get a little sideways price action a couple days. Other than that, the bulls controlled the S&P 500 and quickly silenced any bears willing to make a peep…or rather whimper.
Bull / Bear Market
Both the S&P 500 and All World (ex-USA) indices are greatly outpacing short-term treasuries. Therefore, we are still in a risk on stance. Said another way, the bull market is alive and well. This could be euphoria as the S&P 500 has gathered steam over the past few weeks and is one of the largest up weeks since late 2016. That is a sign of exhaustion, but that doesn’t mean the market will turn on a dime.
Larger markets typically don’t turn sharply and “fall out of bed.” They tend to roll over slowly akin to rolling over a hill that goes from slightly slanted horizontally to increasingly vertical towards the bottom. That is a BIG difference. Right now, there is no rolling horizontally.
The swing indexes we like are the following: Canada / United Kingdom / Japan / Oil / Extended Treasury / Australia / Brazil / International Government Inflation-Protection Bonds
Most of swing indexes were nicely up for the week with the exception of Extended Treasuries. Extended Treasuries is definitely our sore spot. It was more of a neutral week for the index and a very weak buy signal. Frankly, I would like to have seen something a lot stronger as a buy signal, but the index is on the bottom of the trading range and is relatively close to the stop. So we will manage closer to a scalp assuming a second purchase is done and the price action warrants it. Assuming a rise…a slow rise to the top of the trading range would warrant scalping over a swing.
The big winner for this week was the Brazil index. The darn thing was up 6.5%. We have not adjusted the stop up quite yet, but if this week is another week of gains, we will more than likely do so to take some risk off the table.
The FOMC meets this week and Employment numbers are on the schedule for Friday. No rate hike is expected from the FOMC at this time. Any surprises could be the culprit for market action. We will be watching Treasuries like a hawk (as well as the other positions) and overall the market action looks bullish. A pull back is coming, but with such strength, we really need to see some extreme negative price action before we would expect the bears to have a fighting chance to kill off some of these bulls.
The Education/Gratitude Book Club
This past week we covered “The Slight Edge,” by Jeff Olson. It is truly an oldie but goodie! Look, you know this, I know this, the question is whether or not we truly believe it. Jeff’s book is about creating and doing the small steps over time that create the life you want to live. Create the behavior and the results will follow. If you received this, I want you to live the life you were destined to create. If you have objectives…humongous and relatively small…and want to share them, I’d like to hear about them and help…even if my part is only a sounding board. In closing, today is the first day of the rest of your life (another oldie but goodie…).