Saturday, July 18, 2015

A Market Of Stocks

The Market Trend Model (data sheet) remains with a positive bias as the stock market indexes blasted higher this week.  As has occurred so often for the past year, the market indexes moved from the lower end of their respective trading ranges to new highs in a matter of just a few trading days.  The historically long and narrow trading ranges of the market indexes certainly aid in this phenomenon.

The Nasdaq (chart) and the Nasdaq-100 (chart) moved to new all time price highs on the back of outsize earnings news from the likes of Google and Netflix (next week look for earnings from Facebook and Apple). Meanwhile the S&P 500 (chart) and the Russell 2000 (chart) closed just shy of all time price highs. 

It is worth mentioning that some bearish technical divergences appeared at the end of the week.  Most notably, the weekly Nasdaq summation index (chart) failed to confirm the new price high in the Nasdaq.  Additionally, the NYSE new highs-new lows index (chart) turned negative at the end of the week.

However, bearish divergences aside, it was a stellar week for the stock market indexes and for individual stocks.  I am reminded of what Gil Morales (@gilmoreprt) often says, "treat the market not as a stock market but as a market of stocks and focus on the merits of individual stocks."  Nothing can be more true as the market indexes grind to new highs and individual stocks blast higher.

At the moment the stock market appears to want higher prices, but be aware that during the past year the stock market indexes have usually turned lower soon after making new all time highs.  Remain mindful that anything can happen from one day to the next.