The market continues to march higher in 2013 as the short-term to long-term trends and momentum for the S&P 500 remain bullish. The slight deterioration in the daily readings for MACD BUY signals as well as 52-week high data that previously warned of a potential short term top appear to be resolving on continued strength.
Same pattern in the markets today. Slow start with a steady build throughout the day and a positive close. The S&P 500 tacked on another 0.44% today and the Dow rose by 0.46%.
Previous Corporate Hoarding of Cash May Soon Become a Big Positive
Corporate cash will offset Fed removing punch-bowl
For a number of years analysts have bemoaned the fact that U.S. corporations were hoarding cash, refusing to invest it for future growth. Lagging business investment has continuously been tagged as one of the major factors stifling the economy.
The market ended the week strongly as both the Dow and S&P 500 ended higher for the day finishing off another strong week in the markets. The NASDAQ was off as Intel was down over 6%.
Nothing can be more in-your-face to the secular bear market call as new all-time highs in a market. Whether we’re talking about equities, commodities, or bonds, when a security hits new all-time highs it should be the check and mate of a bearish call.
The rally since the start of the year has continued to improve the S&P 500’s long term, intermediate term, and short term trends as all firmly display bullish readings with more than 60% of S&P's 500 stocks having rising moving averages.
A few weeks back I penned a discussion in these pages suggesting one of the most important issues for 2013 may be the potential for a shift in macro deflationary expectations among the investment community.
After a good run it is time to consider what can derail things. The long term technical picture is sound, very sound. Pullbacks at this stage should be orderly and controlled. Here are some of things that I am thinking about.
While there is great uncertainty for the market in gauging how long the Fed will maintain QE, with some fearing it may end later in the year, I can give you $3 trillion reasons why the Fed won’t end QE this year, and $4.5 trillion reasons why we will likely be talking about QE through 2017.
Today, we got the ECB meeting and the Chinese trade metrics – both of which were bullish catalysts for commodities. The effects of both announcements today were effective in bidding up the euro and supplying the market with U.S. dollars.
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