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Continued Strength March 18, 2016

Posted by Tom in Thoughts.
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March 18, 2016  This market just continues to go up.  The old adage “The market will continue to go up until everyone has bought.” likely holds true.  There is still money on the sidelines.  I’m seeing no signs of weakness other than the move is due for a rest (at least).  Sentiment continues to be Bullish as does Money Flow.  Price is continuing up that aggressive purple trend line, but the question really is for how much longer.  This rate is not sustainable.

NASDAQ

Near term resistance is at 4810 with major resistance up at 4905, but that’s about 100 points higher (on the NASDAQ).  There’s not much sense in showing the Accumulation/Distribution or Price Strength pie charts for the S&P 1500 stocks, since they are 80% “green” (bullish) and only 20% “yellow” (neutral).

A minor blip down to roughly 4710 would not surprise me.  Traders could take the market down as a test for supply to see if they can shake out any shares at a lower price.  Earnings season is nearly over and it was just “so-so” at best.  The recovery in oil prices and the weak US$ have helped out this rally.  Couple that with the FED saying that interest rates remain steady and will (likely) not raise much this year and that’s what is adding to the fuel.  Zero % interest rates in Europe and Japan are send capital state side more than likely.

What’s strong near term?  Latin America, Emerging Markets, the Dow Industrials, Basic Materials, Precious Metals and Industrials.  Oddly, the defensive names are not weak, they are just slowing down their advance.  The bottom line is just ride this wave and not get bummed out with a minor correction.  If volume is light, it will confirm that supply is not significant and prices will recover.  BTW, the volume spike on Friday was caused my options expiration.

Take Care and have a good week.      ……….  Tom  ……….

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