We will have a much bigger report over the holiday weekend but first a few notes!
Shorter term, markets are stretched, extended and overbought from their norm. Many are talking it is due for a pullback. They are correct, but that does not mean markets have to pull back. QE markets are different. One should know that by now. Keep in mind, eventually all major indices will revert back to their 50 day moving averages. It is just a matter of when.
The NASDAQ and especially the NDX continue to lead the way as their recent pullback was contained nicely while other areas were hit harder. Speaking of hit harder, small caps continue to underperform markedly but have been coming on recently. One glance at the NDX versus the RUSSELL 2000 speaks volumes.
Strength continues to be found in important “risk” areas like BIOTECH, SEMICONDUCTORS and a decent slew of growth names. It is also important that big FINANCIALS finally caught a bid with the XLF into new high ground.
Lastly, without naming names, we have been told by many that ANOTHER pundit is calling for a crash of anywhere between 30-60%. For the umpteenth time, Wall Street is littered with these people that either call for 100,000 Dow or the next crash. This latest prognosticator forgot to mention that this prediction was also made in 2010 and 2012. We are in hopes you get the point.