DOW – 2 = 17,612
SPX – 1 = 2038
NAS + 14 = 4675
10 YR YLD un = 2.36%
OIL – 1.19 = 76.75
GOLD – 2.80 = 1161.10
SILV – .04 = 15.76
Stocks have been on a run lately, with the Dow Industrials and the S&P 500 hitting record highs yesterday, and the Dow Transports closing at a new high today. Yesterday, the S&P 500 marked its 40th new closing high of the year, versus 45 in 2013. The last five-day streak of record highs was in May 2013, and the next longest was eight days in June 1997. The Dow also hit a record yesterday, marking 6 consecutive record highs, its longest since June. The S&P 500 has closed above its 5 day moving average for the 19th consecutive session, a streak that has only occurred seven times in the past 20 years. And today did not reverse the trend.
Typically, after a rally like this you might expect a pullback; not necessarily a correction, but a pullback; a pause to catch your breath. And so, now would not look like a good time to buy, but you also haven’t seen a signal to sell, at least not yet. Meanwhile, the advance has been so straight and fast that it hasn’t left any support levels in its wake. You might look at S&P 2000 as a round number, but that is meaningless; there was a little consolidation last week around 2001, but that is not much. Beyond that, you look at another weak support at 1925, and then the real strong support at 1820. Working off trend lines, the 50 day moving average is at 1972. In other words, this rally has outrun its support.
Over the past month, you would be hard pressed to find a sweeter chart than the Dow Jones Transports, which hit another record high close, up 30 at 9091. Those trains just keep on rolling down the track.
Yesterday and today seemed more a pause in the markets. Earnings season is winding down, and it looks like a very good quarter for companies. Only about 40 of the S&P 500 companies are left to report, and it looks like 75% of companies that have reported beat expectations, and overall earnings growth is around 10% from the year ago quarter. That’s about as good as it gets.
Time now for another edition of “Banks Behaving Badlyâ€. Today it was announced that 5 banks are being fined for manipulating the foreign exchange market; this is the $5.3 trillion dollar a day market for currencies, also known as the Forex Market or FX. The investigation was led by the US
Commodity Futures Trading Commission, Britain’s Financial Conduct Authority, and the Swiss Financial market Supervisory Authority. The 5 banks that reached a settlement are: Citigroup, UBS, JPMorgan Chase, Royal Bank of Scotland, and HSBC; the usual suspects.
