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US Stocks Still in a Bull Market

US Stocks Still in a Bull Market


US stocks continue their low-volatility, Bull-market run higher, tuning out all of the Noise.

The 2,800 mark on the S&P 500 has been bested 4 sessions in a row on a closing basis. That mark is acting as a floor during pullbacks. The longer 2,800 holds, the more confident Bulls will get about a path being cleared to make a run-up to challenge the highs marked in January.

We learned this week that Netflix’s (NASDAQ:NFLX) fall was seen as a buy-the-dip trading strategy. Resulting in the NAS Comp and S&P Tech indexes setting record highs, and the S&P Smallcap 600 index also marked all-time highs

When both small and large cap parts of the stock market are stepping higher, it’s a sign the breadth of the advance is broad, and therefore healthy.

Note: the S&P 500 cumulative breadth index set another record on Wednesday, and, 2 of the 4 FANG stocks are flat to lower on the week, so they do not get much of any credit for the market’s gain.

Instead, JPMorgan Chase & Co.(NYSE:JPM), Bank of America Corp.(NYSE:BAC) and and Citigroup (NYSE:C) accounted for nearly all of the S&P’s advance.

So far in Q-2’s earnings season the fundamentals are holding up, as 90% of S&P 500 companies are beating analysts’ Q-2 earnings expectations. EPS growth is a slower than expected 20.5%, though it is supposed to accelerate to 22% once energy companies report.

On the Top line

Q-2 revenue growth comes in at a strong 9.5%.

Notably, the trend is your friend, no matter what the day’s headlines say.

The S&P 500’s push above 2,800 this week comes as a smaller contribution from technology stocks in June and July. Consider:

  • From the start of the year through the end of May, 9 of the Top 10 point contributors to the S&P 500’s gain were technology stocks and accounted for 231% of the S&P’s 32-point gain
  • Since the start of June 6 of the Top 10 point contributors are in tech, yet they only account for 29% of the S&P’s 99-point gainer.

What has changed is the breadth of the advance.

Through 31 May there were more decliners than advancers on the S&P 500, so tech stood out. But since 1 June advancers outpace decliners by 2.6:1. Less technology dominance means more room for other industries, and that gives stocks a firmer base from which to work North, and limit any declines.

Friday, the major US stock market indexes finished at: DJIA -6.38 at 25058.12, NAS Comp -5.10 at 7820.21, S&P 500 -2.66 at 2801.57

Volume: Trade on the NYSE came in at 823-M/shares exchanged

NAS Comp +13.3% YTD
Russell 2000 +10.5% YTD
S&P 500 +4.8% YTD
DJIA +1.4% YTD

-LTN’s US Major Stock Market Indexes Technical Analysis for the Week Ended 20 July 2018

Date Symbol Price Technical Analysis Support Resistance 20 July 2018 QQQ 179.08 Bullish (0.34) 177.36 179.47 20 July 2018 DIA 250.58 Neutral (0.24) 250.76 253.94 20 July 2018 SPY 280.17 Bullish (0.41) 279.83 286.58

Have a terrific weekend