Stocks increased yet again, and are pushing the boundaries here in terms of how overbought they are going to get. The S&P 500 surged to 3,508 and an RSI over 79. If we keep climbing, the next level of resistance comes at 3,527. To say the market will keep rising seems like complete lunacy, but that what it does. The Fed hasn’t increased its balance sheets in weeks; there is still no relief bill insight. So, not sure here what derails things at this point. Apple (NASDAQ:AAPL) and Tesla (NASDAQ:TSLA) will both split their shares on Monday, so perhaps that will shift the tied? Not sure.
I, for one, would not be chasing the market up here, but I haven’t been fond of this market the entire time. I have been a happy holder of the stocks I own, and the cash levels I have carried. Luckily, for me, I have owned the right stocks.
You can tell, algo’s/traders whatever you want to call them, are just rotating around at this point, looking catch-up trades. I complained for weeks about how Square (NYSE:SQ) and PayPal (NASDAQ:PYPL) were rising, and how Visa (NYSE:V) and Mastercard (NYSE:MA) were not participating. Well, that suddenly shifted, with PayPal and Square going nowhere and Visa and Mastercard surging. V and MA have a lot of ground to catch up on, but it seems like that is the trade that is taking place. I’m certainly not going to complain.
Noteworthy, in just one week, we went from the number of stocks in the S&P 500 above their 50-day moving average from 64.8% to 81%. Why is this amazing, because since 2012, the 85% region tends to the upper end of the range. Basically, from a near breakdown level to near overbought levels in a week.
Housing Sector
Keep an eye on the HGX, remember it told us the Fall of 2018 crash was coming. Nothing to worry about yet.
Biotech
Maybe vaccine fever has pasted, but the SPDR® S&P Biotech ETF (NYSE:XBI) hasn’t been a strong performer since July 20.
