The bulls showed up and sent stocks soaring last week helping the S&P 500, Nasdaq composite and Nasdaq 100 hit fresh record highs. The month ends next week and the end of the month typically, but not always, has a slightly upward bias. One of the hallmarks of a bull market is to see the market brush off nearly all negative news and race higher. Since the election, that is exactly what is happening. The market had every chance in the world to fall after the big sell-off on Wednesday 5/17/17. Instead of falling, the bulls showed up and quelled the bearish action and sent stocks racing higher. Once again, the sell-off was very short in nature which just reiterates how strong this aging bull market is right now. In the short term, May’s lows are the next level of support to watch, then the 50 DMA line for the S&P 500, Dow Industrials, Nasdaq Composite, and Nasdaq 100. Then, the next important levels of support to watch are: Russel 2000: 1351, then 1335, then 1308. The Dow Industrials: 20.6K, then 20.4k, S&P 500: 2352, then 2322.25, Nasdaq Composite: 5995, then 5805, then 5769.39. Until those levels are breached on a closing basis, the bulls remain in control on a short, intermediate, and long term time-frame. We are often asked about why the market is holding up so well with everything that is happening in the political arena. The answer is simple: investors only care about what policies come out of D.C. that directly impact Main Street or Wall Street. So far, the policies have been bullish for the economy and, as investors look forward there appears to be more economic-friendly policies in the pipeline. As previously mentioned, the other, more important, reason is that we are in a very strong bull market, and we pay much more attention to how the market reacts to the news.
Thur & Fri Action:
The S&P 500 and Nasdaq composite both vaulted to fresh record highs on Thursday as a slew of big cap tech stocks soared to fresh record highs. Shares of Amazon (AMZN), hit $999/share and are currently flirting with $1,000/share. Separately, oil prices plunged -5% after OPEC agreed to extend the production cuts until March 2018. Elsewhere, jobless claims hit 234,000, which was slightly higher than the prior week’s reading but remained near the lowest levels in 40 years. Stocks were relatively quiet on Friday after the government revised Q1 2017 GDP up to 1.2%. Meanwhile, Durable Goods fell -0.7%, missing estimates for a decline of -1.0%.
Market Outlook: Stocks Are Strong
The market is very strong. As always, keep your losses small and never argue with the tape. Want Adam To Be Your Personal Portfolio Consultant? You Don’t Have To Feel Alone In The Market, There Is A Better Way: Learn More