Well, there seems to be no disagreeing with the S&P 500 reaching the psychologically important 1700 level, an all-time high. But there are several different moves you can make in this kind of market — so we’ve rounded up our InvestorPlace advisors to give you their insights on what to watch for next week.
Jon Markman, Trader’s Advantage and CounterPoint Options
Bulls have proven their mettle by buying small-cap stocks in the past month, and the big-caps of the major market benchmarks are now chipping in too. This is bulls’ market to lose, so bears have to step it up now if they want to maintain credibility. So far the sellers have blown every chance, and bulls are running them over. The economy is not nearly as strong as it looks on the surface, so bears will keep getting more chances. But if they keep kicking those opportunities away, and bonds become increasingly unattractive, more and more private investors are going to decide to finally rejoin the equity market on every little pullback.
John Jagerson and Wade Hansen, Slingshot Trader
Even though the indexes are at relatively extended levels, it looks like the market may have some legs. That means we need to keep concentrating on anything that’s bearish, or anything that’s fundamentally weak or in a downtrend. For anything that’s really positive or bullish, it behooves us to pay attention to the whatever is the most fundamentally attractive in their sector.
Ken Trester, Maximum Options
Our index indicators continue to give bullish readings, unchanged from last week. In fact, the upward momentum that seemed to be slowing a week ago looks to have re-accelerated this week. Most telling in that regard is the Dow Jones Transportation Average, which gained more than three percent on Thursday alone. The Dow Jones Utility Average is also bullish, even in the face of rising interest rates, providing a solid Dow Theory bullish signal. The bullish trend will remain in place as long as the Dow is above 15,260, the S&P 500 above 1650, and the Nasdaq above 3500.
Our internal indicators remain neutral to bullish, also unchanged from a week ago. The Advance/Decline Index and Cumulative Volume Index are bullish, as are all nine S&P sector funds. But the 200-day Moving Averages Index has still been unable to retake its own 50-day moving average, and in fact is lower this week than last on an absolute value basis. This indicator has been losing strength as Treasury yields have risen, and for that reason continues to be a trend that bears close watching. At some point higher yields will be too much for stocks to withstand.
John Lansing, Parabolic Options, Trending123 and Power Trading at the Open
For the past couple of weeks, the market has been stuck in a sideways trading range going nowhere fast — but has managed to climb above the highs from two weeks in all the major averages. Pretty much all of the index charts look the same: We put in a short-term top about a week and a half ago, and we haven’t moved a lot up or down ever since, except for marginal new highs.
In a market like this, it’s hard to predict which area will come out on top—but right now midcaps are absolutely flying with the biggest green bar of the year Thursday.
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