Here, I’ve got this company for you to buy. It’s been in a choppy range recently but it just broke out to all time highs with an invalidation point a few percent away for a great risk/reward trade.
Except it’s not a company. It’s the Dow Jones Industrial Average.
My point? If this was a stock you’d be all over it, as I suspect many market commentators would, rather than trying to find the latest bearish data point or Greek tragedy to keep you from buying it.
And it’s not the only one. The S&P now sits above 2100 at all time highs. The NASDAQ has been negotiating levels not since the heady days of 2000, and is now just a few percent from all time highs.
I joked recently that the Russell 2000 could be working on the biggest breakout since Andy Dufresne busted out of Shawshank. Well it looks like it finally did it with this week’s follow through confirming the move. The Russell 2000. Crawled through 12 months of crap and came out clean the other side.
New highs weren’t limited to the US either. Here’s the DAX, recording its sixth consecutive week at all time highs:-
It seems bizarre to me that for the last few weeks, and especially the last few days, people have attributed every twist and turn in the S&P to whatever the latest goings on in Greece are, and yet European markets, who you would imagine would be at greater risk of being impacted, appear to have been oblivious to it this entire time.
Assign whatever causality you like to market moves, but you can’t backtest news headlines, or what the stories or opinions were at the time, or how it felt. Price alone tells the story. Price is the final arbiter in everything we do.
New highs extended beyond the US and Europe too. Japan’s Nikkei surpassed its 2007 highs to record the highest weekly close since May 2000, shown here on a 20-year monthly chart:-
An interesting play might be $EWJ which has a different makeup to the Nikkei but staged a range breakout of its own this week:-
Turning back to US markets, the strength and breadth of this latest move to all time highs is encouraging. Of the nine S&P Sector SPDRs, five ended the week at all time highs: Consumer Discretionary, Technology, Healthcare, Industrials, and Materials. Biotechs also came roaring back, shown here via $IBB relative to the $SPY:-
Our Marketfy portfolio is now +5.3% YTD vs +2.5% for the S&P. There were no new portfolio signals this week, and 9 of our 13 names made all time highs. Of our 12 additional trade ideas, 9 made new highs, and we had one exit and one new entry.
We’ve got a healthy amount of portfolio names and trade ideas on the go at the moment, but there are still plenty of other names waiting in the wings if we need them. That’s what we should expect with good breadth at all time highs. Consumer Discretionary names still dominate our list, followed by Healthcare and Technology. Some are ready and waiting, some are still setting up.
Here’s a sample of just 10 from the full list of 30 names:-