Just Right… for Indexes

Don’t look now but markets are near all-time highs (at least for the major indexes).

Last week’s close was the highest (weekly) in history for the S&P500. Discount the fact it was a holiday-shortened week, but this is still a strong signal.

Perhaps most noteworthy was the jobs report. With a big up-side surprise, this makes for an interesting conundrum: is the economic strength such that the Fed will change course, or are rate cuts still in the near future? This week should provide meaningful insight into this question.

In the mean time, it looks like things are in a sweet spot right now: bad news signals Fed intervention, and good news signals… good news. It’s the rare cocktail of almost everything aligning (in the short term) for a push higher.

Futures are indicating a lower open for the SPX, but this may simply be because traders are returning from a holiday-extended weekend and need to square up their portfolios. Once that dust settles, things appear ripe for a short-term push higher.

It appears the SPX has 3000 in its cross-hairs. If the current technical trend comes to pass, once breached, there may be a quick move towards 3100 before the index pulls back to re-test this level.

Keep an eye on the overall picture though. While the indexes look great, not every area of the market is enjoying prosperity. The interesting thing about this push higher is where the money is flowing. While the indexes move higher, a lot of small and mid-cap stocks appear to be left behind in this rally. (Sure, they’re moving higher – but they’re lower than their March highs, unlike the larger-cap indexes which are breaking out to all-time highs).

What this means is unclear at this time. Do we have another significant leg higher for all equities (especially when looking at the yields in the fixed income markets today)? Or are we looking at the last flash of brilliance as investors pile into large-caps before the bears have their day? Time will tell. But for now, the technical picture looks short-term bullish.

For a deeper dive into the technical picture, join us on this week’s forum call. Until then, keep an eye on the 3000 level for the SPX. If this gets breached Monday, things could go as high as… 3082ish this week (yes, you read that right). For now, this number seems ambitious. But, as goofy as it may seem, 3025 looks probable at this point.

IMPORTANT DISCLOSURE INFORMATION

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by BigFoot), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from BigFoot. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. BigFoot is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the BigFoot’s current written disclosure statement discussing our advisory services and fees is available for review upon request.