Despite some late day profit-taking, the S&P 500 Index managed to close above 2,000 today for the first time ever. The final tick was 2,000.02 as compared to an intra-day high posted late morning today at 2005.05. If an investor could have bought the exact intra-day low at 666.80 in early March 2009 and then held his position until today, he would now have a 200% gain, almost exactly.
Just a couple of quick notes this evening:
1. I think it's noteworthy that the Dow Jones Transportation Average AND the Dow Jones Utility Average both closed lower today (-0.39% and -1.00%, respectively).
2. A daily chart sell signal was triggered today by my computer system in the SPDRs Select Sector Utilities ETF (XLU).
3. A daily chart buy signal was triggered by my computer system today in the TYX 30-year Treasury Bond Yield Index. This is equivalent to a sell signal in the actual 30-year T-bond price.
4. A buy signal was triggered by my computer system yesterday in the VIX (CBOE Volatility Index). This was unusual because yesterday was another low volume UP day in the market.
5. Daily chart sell signals were triggered by my computer system yesterday in the Philadelphia Semiconductor Index (SOX) and the Semiconductor Holders ETF (SMH).
6. Does anyone really think that Russia will let the separatists in Eastern Ukraine be defeated by the Pro-Western Kiev Central Government? No chance!
7. Does anyone think that the latest crisis in the Mideast involving ISIS (or ISIL) will be resolved anytime soon? No chance!
8. U.S. Durable Goods Orders were up a record 22.6% in July as reported today, and U.S. Consumer Confidence jumped to a 7-year high this month. The Federal Reserve is already well into a "stealth" tightening with its "taper" of monthly bond purchases. How long now before Yellen & Company have to telegraph the real tightening that's just around the corner? Bullish investors are so delirious now that I actually read a report today which suggested that Fed rate hikes would be good for stock prices! Simply incredible!! What's clear to me is as soon as the Fed telegraphs its first rate hike (for later this year or in Q-1 2015), four more rate hikes will be immediately priced into the market. The 10-year T-note yield will rise above 3.00% from its current level near 2.39% before you can say "Bear Market"!!
9. Does anyone really know what's happening in China's economy right now? Is there a housing price collapse now underway there that will dwarf the post-Lehman housing collapse in this country in 2008? The debt crisis in China looks very real and is now an imminent threat to the entire global economy.
10. In my humble view, the level of corporate stock buy-backs has peaked; the level of M&A activity has peaked; and corporate profit margins have peaked.
In the interest of full disclosure, I am short the S&P 500 Index in my managed accounts. I fully expect to capitalize on a major correction in the U.S. stock market over the very near term horizon.
Postscript (added Wednesday Night August 27th): A daily chart sell signal was triggered today in the U.S. Dollar Index (DXY). This sell signal is especially noteworthy given the apparent recent strength in the U.S. economy vis-a-vis the Euro Zone and across Asia and also given higher relative U.S. interest rates. It is my view that a bearish turn in the U.S. Dollar here would be another negative for U.S. stock prices (and maybe even the key "straw" that breaks the back of this incredible bull market).
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| U.S. Dollar Index (DXY) Daily Chart with Computer-generated Buy & Sell Signals |
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