Courtesy of Blain.
Bulls dominating this week – as we said a few times in our recaps, one would want to see slight pullbacks to work off oversold conditions and both “down days” this week were minor indeed. The S&P 500 and NASDAQ both fell a tiny 0.09%. Interestingly, as we “go to air” tonight a military coup seems to be happening in Turkey so we’ll see what comes of that Monday in the markets.
Retail sales beat economists’ expectations, rising 0.6% in June versus consensus of a 0.1% increase, in another sign that consumer spending increased in the spring.
Fun fact: If you believe in this advance-decline indicator, history suggests the market is headed to a very positive place.
Over the 10 trading sessions through July 12, the average number of advancing stocks on the New York Stock Exchange (NYSE) exceeded the average number of declining stocks by a ratio of more than two to one. Following the 13 prior instances since 1949 in which the 10-day A/D ratio exceeded two-to-one…. on average…the Dow was 7% higher within three months, 15% higher in six months, and 20% higher in one year. Over only one of the 13 three-month periods did the Dow decline, for example, and that lone loss was small — just 0.42%. At the six-month horizon, the Dow was higher in all 13 instances.
Have bears given up? TINA!!!
According to Bank of America Merrill Lynch, July 11, when the S&P 500 ended in record territory, investors poured $6.4 billion into U.S. stock exchange-traded funds, the biggest one-day inflow since December 2015. The BAML declared the July 11 “the day when bears capitulated into risk assets.”
“The explanation for the rally since Brexit had been the TINA argument, that there is no alternative, given how ultralow bond yields are,” said Mark Kepner, managing director of sales and trading at Themis Trading.
These twin breakouts on both indexes have held all week.
Here is the Russell 2000 – looks like a nice base is forming here too the past week.
The NYSE McClellan Oscillator has been able to pull back the past few sessions from quite overbought levels.
Citigroup (C) reported results that easily beat analysts’ expectations. The stock finished down but recall it rallied strongly yesterday on JPMorgan’s results.
Wells Fargo (WFC) sank 2.8%. The bank posted a drop in second-quarter profit, but the results were in line with expectations, disappointing investors.
Japanese social network company Line (LN) fell on its second day as a public company.
Remember when Fitbit (FIT) was the hot, sexy new IPO?
Have a good weekend and we’ll see you Monday when we begin to enter the heart of earnings season.
