US Stocks Still in a Bull Market
$DIA, $SPY, $QQQ, $RUTX, $VXX
US stocks continue their low-volatility, Bull-market run higher, tuning out all of the Noise.
The 2,800 mark on the S&P 500 has been bested 4 sessions in a row on a closing basis. That mark is acting as a floor during pullbacks. The longer 2,800 holds, the more confident Bulls will get about a path being cleared to make a run-up to challenge the highs marked in January.
When both small and large cap parts of the stock market are stepping higher, it’s a sign the breadth of the advance is broad, and therefore healthy.
Note: the S&P 500 cumulative breadth index set another record on Wednesday, and, 2 of the 4 FANG stocks are flat to lower on the week, so they do not get much of any credit for the market’s gain.
Instead, JPMorgan Chase & Co.(NYSE:JPM), Bank of America Corp.(NYSE:BAC) and and Citigroup (NYSE:C) accounted for nearly all of the S&P’s advance.
So far in Q-2’s earnings season the fundamentals are holding up, as 90% of S&P 500 companies are beating analysts’ Q-2 earnings expectations. EPS growth is a slower than expected 20.5%, though it is supposed to accelerate to 22% once energy companies report.
On the Top line
Q-2 revenue growth comes in at a strong 9.5%.
Notably, the trend is your friend, no matter what the day’s headlines say.
The S&P 500’s push above 2,800 this week comes as a smaller contribution from technology stocks in June and July. Consider:
- From the start of the year through the end of May, 9 of the Top 10 point contributors to the S&P 500’s gain were technology stocks and accounted for 231% of the S&P’s 32-point gain
- Since the start of June 6 of the Top 10 point contributors are in tech, yet they only account for 29% of the S&P’s 99-point gainer.
What has changed is the breadth of the advance.
Through 31 May there were more decliners than advancers on the S&P 500, so tech stood out. But since 1 June advancers outpace decliners by 2.6:1. Less technology dominance means more room for other industries, and that gives stocks a firmer base from which to work North, and limit any declines.
Friday, the major US stock market indexes finished at: DJIA -6.38 at 25058.12, NAS Comp -5.10 at 7820.21, S&P 500 -2.66 at 2801.57
Volume: Trade on the NYSE came in at 823-M/shares exchanged
NAS Comp +13.3% YTD
Russell 2000 +10.5% YTD
S&P 500 +4.8% YTD
DJIA +1.4% YTD
HeffX-LTN’s US Major Stock Market Indexes Technical Analysis for the Week Ended 20 July 2018
Have a terrific weekend