Not every index and not every sector recorded a new high this week, but several key indexes recorded new highs and the majority of sectors hit new highs. This shows broad market strength that validates the long-term uptrend in stocks. The only negative is that stocks are short-term overbought after big moves. This negative, however, is actually a positive because it takes strong buying pressure to become overbought. On a closing basis, the Dow Industrials, the S&P 500, the Nasdaq 100 and the Dow Transports recorded new 52-week highs this week. The S&P Small-Cap 600 and the S&P MidCap 400 remain below their 52-week highs, but both indices surged over 10% with very strong moves. At this point, the majority of the major indices hit new highs and this is long-term bullish.
The offensive sectors also performed well with the Finance SPDR (XLF), Technology SPDR (XLK) and Industrials SPDR (XLI) hitting 52-week highs on a closing basis. The Consumer Discretionary SPDR (XLY), which is the fourth offensive sector, is less than 2% below its 52-week high. Also note that the HealthCare SPDR (XLV), Consumer Staples SPDR (XLP) and Utilities SPDR (XLU) hit new highs this week. That means six of the nine sectors hit 52-week highs this week. The majority of sectors are clearly in long-term uptrends and this also supports a long-term uptrend for stocks in general.
Good trading and good weekend!
Arthur Hill CMT