The S&P 500 Index (SPX) $SPX today closed the week at a new all time closing high. It did not quite make a new all time high. The weekly stock chart below shows the price action. The Index is trading above the trend filter. There is nothing not Bullish going on here. The cycle inversion is asserting itself. Pure trend investing, no personal opinions.
Interestingly the S&P 500 Index $SPX has closed over the Monthly High in October of $3,549.85, Bullish monthly. Similarly, The Index is trading over last week’s High. And today, it opened higher and closed higher than yesterday’s high, Bullish daily. The Index has tried, but failed, to close over the Monthly High, and all time High, in September of $3,588.11. A cycle inversion may be in progress here, we’ll wait and see. Stock chart below.
No forecasts, no predictions. ..this is pure Trend Investing.
On pure trend investing analysis, we want to see the Dow Jones 30 Index $DJI close over $28,194, by the end of the week, as displayed on the stock chart below. This is a significant area of price resistance. There are multiple price reversals in this area. The Dow is trading below the trend filter, as shown in the second stock chart below, bottom panel.
Trend investing – no forecast, no prediction. We can see significant support at the $3,231 price level. This is an area of at least three price reversals and subsequent rally. So at this level it held and bounced. A close under this area would indicate a negative market, having failed the long term trend filter. A failure to hold support would indicate a lower monthly high, and a lower monthly low, indicated in the stockchart below.
The S&P 500 Index (SPX) $SPX today is crossing from above to below the long term trend filter. The stock chart below shows the indicator in the lower panel. Also, the index is breaking to the downward side on 5 day, and also 21 day channels.
Base metals, and copper in particular, are leading the commodities rally. Both breaking out to new 52 week highs, and above trend. The “inflation” Bulls are doing a cubicle dance. Copper is outperforming gold on a relative strength basis.
The two stock charts below show the breakouts: The Base metals (DBB) ETF, and, The Copper (CPER) ETF.
And a relative strength chart, copper (CPER) is trading 7.7% above gold (GLD), over a 200 day average, in the lower panel.
The S&P Industrial Select Sector Index $IXI, (XLI) ETF, last week indicates a long term Bullish trend. The long term trend filter at or in excess of a 20% annualized rate of growth was indicated when it crossed from below to above, its’ 200 day moving average. Additionally, the Index is gaining momentum, by way of 5 day, and 21 day, breakouts indicated since the trend filter signal.
This is pure trend investing analysis. No predictions. No forecasts. No fundamentals. No news.
The Russell 2000 Small cap stocks ETF (IWM) $IWM indicates, this week, long term Bullish. It is exceeding a 20% annualized rate of growth (CAGR). And, we can see on the stock chart below, a long term breakout, above $159.50. We’ll look to see if it closes the week at this level. On a relative basis, it is stronger than the S&P 500 Index ETF (SPY) $SPY, over a 200 day moving average (relative strength chart below). This may be indicating more domestic capital flow into the market, relative to international capital flow. This an ideal trend investing setup.
If nothing else, at least someone is awake over at IBD. Last week they added another gold stock, Franco Nevada (FNV), to their ETF (FFTY). So this make two gold stocks, the other is Kirkland Lake (KL).
The ETF itself, although long term positive, is under-performing many other ETFs on a relative strength basis. The SPDR S&P 500 Index Growth Stocks ETF (FFTY), for example, is outperforming, long term, The IBD Fifty (FFTY). This is curious because The IBD “CANSLIM” stock picking criteria methodology, in addition to fundamentals, includes relative strength and trend investing. It seems CANSLIM isn’t working real well in the context of putting together the ETF components. IBD has a large number of followers, ie. readers. Just how many of these readers are doing their own analysis? ..we wonder.
The SPDR Growth Stock ETF (SPYG) relative to the IBD Fifty (FFTY) ETF, over a 200 day moving average, SPYG/FFTY, the bottom panel shows the relationship, posted below: