Chest Pounding

Quick Take: Buy Bias. The train rolls until it doesn’t.

The sound of the bull pounding his chest in victory sure sounds like a signal for a top being put in. 

For The Week:

INDEX CLOSE% CHANGEYTD %
DJIA28653.872.60.4
Nasdaq11695.633.430.3
S&P 5003508.013.38.6
Russell 20001578.341.7-5.4

The S&P 500 and Nasdaq set record highs as the notched in five consecutive weeks of gains. And the Dow Jones Industrial Average turned positive for the year. 

Bullishness feels to be at an extreme. The market will put in some type of top at some point, when, and how long it lasts is anyone’s guess. 

The market headline of the week was with Fed Chair Powell who said the central bank would allow inflation to run moderately beyond 2.0% over time to make up for time when it ran below this mark.

The Nasdaq’s 30% gain for the year jives with the stay at home trends its technology leaders accommodate.

This has been a growth stock nirvana like this author hasn’t seen since 2000.  

Salesforce (CRM) gained 30% this week, with a bulk of those gains coming after its earnings report. 

On Monday the Dow will add Salesforce, Amgen (AMGN), and Honeywell (HON), which will replace Exxon Mobil (XOM), Pfizer (PFE), and Raytheon Technologies (RTX) prior to Monday’s open. 

LEADERSHIP

Tech remains the major pull. 

Facebook (FB, +9.98%), Apple (AAPL, +0.35%) Amazon (AMZN, +.09%), Netflix (NFLX, +3.56%) Google (GOOG, +4.05%) Microsoft (MSFT, +7.46%) 

Biotech continues to pull back as it tests a five year base breakout.

Gold is also in pullback mode.  

SECTOR ACTION

SYMBOLNAMEWEEKLY % CHG
XLCCommunication Services Sector Fund4.63
XLKTechnology Sector Fund4.43
XLFFinancial Sector Fund4.32
XLBMaterials Sector Fund3.36
XLIIndustrial Sector Fund3.06
XLYConsumer Discretionary Sector Fund2.98
XLPConsumer Staples Sector Fund2.29
XLREReal Estate Sector Fund1.87
XLEEnergy Sector Fund1.14
XLVHealth Care Sector Fund1.1
XLUUtilities Sector Fund-0.59

TECHNICALLY SPEAKING

  • NYSE volume was up 6% from last week as advancing outpaced declining by nearly 2 to 1. 
  • Nasdaq volume was slightly off las week’s pace, with a 1.5, advance/decline ratio. 
  • NYSE advancing issues held a solid edge of decliners by a 2.1 ratio.
  • Nasdaq advancing issues held a 1.5 edge over decliners.

Accumulation/Distribution Days For The Last Month:

  • S&P 500: 7/2
  • Nasdaq: 3/4
  • Dow: 5/5

PLEASE REFER TO THE GROWTH STOCK REPORT FOR INDIVIDUAL NAMES. 

Play it nice,

Dan