The Dow Jones Industrial Average posted its 10th straight winning day today, and the S&P 500 Index is now less than 2 points away from its record actual closing high of 1565.15 as set on October 9, 2007 . The intra-day record high in the S&P 500 Index is 1576.09 as set on October 11, 2007 . Favorable U.S.
Here are today’s closing marks, with changes from Wednesday’s close:
Thursday’s Closing Prices
Dow Jones Industrial Average 14,539.14 +83.86 +0.58%
Dow Jones Transportation Average 6,281.24 +48.65 +0.78%
S&P 500 Index 1,563.23 + 8.71 +0.56%
NASDAQ Composite Index 3,258.93 +13.81 +0.43%
Russell 2000 Index 953.07 + 9.17 +0.97%
I happen to catch a quick note on investor sentiment this morning from Barry Ritholtz in his great blog “The Big Picture”. According to the American Association of Individual Investors (AAII), bullish sentiment jumped 14.4 points to 45.4% in it latest survey of members, while bearish sentiment fell 6.5 points to only 32.0%. These numbers clearly don’t reflect the “irrational exuberance” that almost always signals a major top, but I have a strong hunch that both Market Vane and Consensus bullish sentiment numbers will be above 75% when reported this weekend in Barron’s Magazine. If we throw in another reaction low as recorded today in the VIX Index at 11.30, then it’s not a stretch to conclude that maybe there is a little too much complacency among stock investors right now.
While the S&P 500 Cash Index is only 1.92 points away from its all-time record close, the single most popular ETF contract, the SPDR S&P 500 ETF (symbol SPY), actually ended today at a new all-time closing high of 156.73. However, the intra-day high at 157.52 in the SPY is still intact from October 11, 2007 .
I guess the $64,000 question is: “now that we are at record all-time highs, where do we go from here?” Is there enough upside momentum to carry this market to Dow-15,000 without a correction? Dow-15,000 is approximately +3.17% from today’s all-time record close. Can the S&P 500 Index advance to 1,600 without a correction? SPX-1,600 is just +2.35% above today’s closing level. The answer is NO !
For your review, I have attached a copy of the weekly bar chart for Amazon (AMZN). This popular and successful internet giant has been a market leader over the last 4 years of the current bull market. AMZN is up 666% since November 2008. However, JP Morgan downgraded Amazon this morning to “Neutral” from “Overweight”. This action probably served as the catalyst for my computer generated weekly chart sell signal in Amazon, which is reflected by a “red dot” on AMZN’s chart below.
Bottom Line: Throughout this current up leg which began on November 16th, 2012 , there have been very few weekly chart sell signals in any of the hundreds of stocks that I follow each day. Of course, this makes perfect sense because most stocks have moved higher over the last 4 months, without significant corrections. However, weekly chart sell signals were triggered in my computer system at today’s close in three key stocks: Amazon (AMZN), Salesforce.com (CRM), and Costco (COST). In order to get a weekly chart sell signal in any major market average this week, there has to be a significant downturn tomorrow. Right now, with almost everyone thinking that the “path of least resistance” for stocks is higher, I believe it’s fairly safe to say that very few traders, investors, or analysts are expecting a major correction to begin tomorrow. Of course, if this statement is true, then tomorrow is the mostly likely turn date for the U.S.
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| Amazon (AMZN) Weekly Bar Chart with Computer-generated Buy & Sell Signals |
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