• 141 days Could Crypto Overtake Traditional Investment?
  • 146 days Americans Still Quitting Jobs At Record Pace
  • 148 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 151 days Is The Dollar Too Strong?
  • 151 days Big Tech Disappoints Investors on Earnings Calls
  • 152 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 154 days China Is Quietly Trying To Distance Itself From Russia
  • 154 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 158 days Crypto Investors Won Big In 2021
  • 158 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 159 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 161 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 162 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 165 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 166 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 166 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 168 days Are NFTs About To Take Over Gaming?
  • 169 days Europe’s Economy Is On The Brink As Putin’s War Escalates
  • 172 days What’s Causing Inflation In The United States?
  • 173 days Intel Joins Russian Exodus as Chip Shortage Digs In
Another Retail Giant Bites The Dust

Another Retail Giant Bites The Dust

Forever 21 filed for Chapter…

Is The Bull Market On Its Last Legs?

Is The Bull Market On Its Last Legs?

This aging bull market may…

  1. Home
  2. Markets
  3. Other

Most Weekly Charts Continue on Breakout....Understanding The Bull After Fink Speaks....

S&P500 Weekly Chart

This has been one crazy market for quite some time now. The endless overall up trend has been with us for seven plus years. The last two years have been a time for consolidation in to the teeth of some very bad news. When bad news can't sell a market you understand it means that it's simply basing and waiting on the right combination of news to try the next leg up. It finally came in the form some good employment numbers. Job creation reached a level that allowed the bulls to race onward and upward. Prior to that report we were dealing with a series of bad reports on the jobs, Ism manufacturing and Ism services numbers. The market simply couldn't find a catalyst. Earnings were on the decline as well and still continue to this point. The market bears tried to get the market down as bad news kept hitting from everywhere but they just couldn't get the job done consistently. They'd get a nice down move but couldn't seem to ever follow through. The bulls would come in and save the day. After a certain period of time the bears started to give up. A terrible Ism manufacturing report wouldn't sell things off. A bad jobs wouldn't sell things off. Terrible earnings would hit a particular stock but it wouldn't hit the market. If you get hit over the head time after time you eventually want the pain to stop. That's what happened to the bears. The pain was getting out of hand and thus they simply walked away. The bulls took full control once the Brexit selloff occurred and it was off to the races and the market hasn't looked back. The bulls remain in full control above 2100-2134 on a closing basis with nothing out there at the moment to stop the bulls from advancing things up and away other than overbought conditions from time to time. It hasn't mattered. The bull is alive and kicking.

Wilshire 5000 Weekly Chart

The market did get some truth yesterday in the from of Mr. Fink. He runs the worlds largest fund. He's extremely well respected with many considering him the perfect fit for the fed when Yellen steps down or is let go after the elections. He said quite bluntly that stock prices don't make sense at current levels. When he speaks the market usually responds. He clearly wasn't bullish with that type of statement yet today the market said who cares. He's wise and understands the bubble that has been created. He doesn't know when it'll burst and neither do any of you. No one can predict the end of mania. We know that we are seeing the first signs of froth hitting the market. We had our first .40 put/call reading yesterday in quite some time and I feel quite sure the bull bears spread will be in the 30's next week, possibly as high as 35%. The froth is ramping now as have broken out. If we get towards 2250-2300 the bull bear spread will be reaching the 40's. That will be the red flag to run for the hills but we shall if we ever do make it that high.

NASDAQ Weekly Chart

While it seems likely, the disconnect is so bad I always worry that the dance will end without warning. No way to know. What I do know is the disconnect is being seen and understood by the very best in the business. It'll all end badly some day but no one knows when and what the catalyst will be. For now we have major earning ahead of us with the majority of the SP 500 due to report over the coming 2-3 weeks so lets see if we get any improvement. Be careful and enjoy the bull while it's with us.

Dow Transports Weekly Chart

 


Please join us for a free 3 week trial at www.TheInformedTrader.com

 

Back to homepage

Leave a comment

Leave a comment