The overbot stochastics and negative divergence with stoch's and RSI (red lines) create the selling last Wednesday but stocks recover on Friday. The histogram MACD line and money flow are long and strong wanting to see another matching or higher high in price in the 4878-4885 area. It would be prudent for the bears to close that gap at 4885-4890 before heading south. Price has not yet violated the upper band at 4904 (pink) so that is on the table. Of course the all-time highs at 4910 and 4912 are critical levels that either confirm the broad stock market joy, or not.
Keystone the Scribe recaps the AGMANHASFUN ("A G-Man Has Fun") stocks each week in the chronology. These key stocks, GOOGL (Alphabet), GE, MSFT, AAPL, NFLX, HD, AMZN, SBUX, FB, UA and NKE, are the high-flyers that have carried the broad stock market higher for the last 2 to 3 years. These stocks had propelled the NDX to new highs in October but are now soggy.
The three-week stock market rally began on 11/7/16 the day before the 11/8/16 election. Trump was awarded the victory in the wee hours of the morning on Wednesday, 11/9/16, and that began an acceleration higher in stocks. Note, however, that the NDX quickly stalled. Initially, investors were not running into the high-flyers after the election. From 11/14/16 and on, however, the high-flyers catch a bid and propel the major indexes to new highs sans the NDX.
The stock markets move higher for the last eight years fueled by the central bankers easy money. Companies are using easy credit conditions to buyback stock and artificially pump stock prices higher. This enriches the wealthy elite that own large stock portfolios. Companies scoff at using the Fed's and other central banker's easy money to buy equipment or hire workers. There is no reason to do this in a sluggish stagnant economy. Instead, the Fed rewards the wealthy.
Watch NDX closely this week since a new all-time high will confirm sustainability in the equity rally and chart the path for SPX 2300 that many Wall Street analysts continue to forecast for this year. If NDX stalls, the bears will begin growling. The RUT (Russell 2000) small caps are outperforming since the election since Trump's potential protectionist agenda will hurt multinationals but the more domestically-focused small caps would fare better. Commodities, basic materials and industrial stocks also rally strongly believing that lots of infrastructure spending is on tap. Copper goes through the roof printing a record rally. Banks also rally after the Trump victory.
The stock market rally will likely not continue without the help of the AGMANHASFUN stocks so watch them closely as well as the NDX. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.
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