The Closing Look
Stocks enjoyed strong gains on Tuesday helping the major indices jump back above their respective 50 day moving average lines. Stocks extended gains after U.S. new home sales jumped to the highest level in eight years. New home sales rose to 619k, beating estimates for 523k. Meanwhile, the Richmond Fed Manufacturing index plunged 15 points to negative -1. Elsewhere, the U.S. Dollar and Crude oil rallied sharply while gold and silver tanked.
Gary’s Thoughts: Very simply…another chance for the market to prove itself. Very good day! Volume good!
American Association of Individual investors have put out over 1500 readings on sentiment . 2% of the time their have been 19% bulls or less including this week. of these 30 (3 have been in the last year) 26 times the market was higher one year later on average 19% and on average up 12% six months later. One time it was lower one year later. Obviously , the jury is out on the three readings of 19% and lower that we saw in the last year the most recent was 2/11/2016 we got a 19% reading only one day off the low which you adroitly called.
I suspect the market is up, cause it is eom ( end of month ),, and cause the fed wants the market up.
If the fed were to let go of this market, my bet is, the market would sink like a dead rock.
House sales up, ya, but it’s toll brothers, and they sell to the rich.
I’ll bite on the rising house sales when middle class/price houses sales go up, on morgages which are about 4%… ha ha fat chance (!), not when kids who graduate from college are moving back home with mom and dad, putting off starting families, and they are getting jobs at Minimum wage at Wallmart, and Starbucks.
This market will rally, and continue to rally, so long as the money printed by the fed keeps flowing;;; and this market rally will stop, when the fed stops flushing it’s ” shekels” into the stock market toilet.