MON-WED: Fed- Easy Money Stance Here To Stay
THURS-FRI: Stocks Drift Higher
Stocks overcame earlier weakness on Thursday and closed higher which is a testament to how strong the bulls are right now. Weekly jobless claims slid by 6k to 312k in the same week that the household survey for the June employment report was conducted. The Philadelphia Fed Index rose in June to 17.8 from 15.4 in May. Meanwhile, the Leading Indicators Index for May rose by +0.5% on top of a 0.3% increase in April. Stocks were quiet on Friday and closed near their highs for the week (another bullish sign).
MARKET OUTLOOK: Buy Weakness
The market is counter-intuitive in nature and tends to fool most people most of the time. That said, everyone was expecting the market to pullback but instead- it rallied and hit new highs. This illustrates how strong the bulls are right now and that weakness should be bought, not just strength. Keep in mind that this bull market is aging (turned 5 in March 2014 and the last two major bull markets ended shortly after their 5th anniversary; 1994-March 2000 & Oct 2002-Oct 2007) but until we see signs of distribution (heavy selling) the market deserves the bullish benefit of the doubt. As always, keep your losses small and never argue with the tape.