Monday marked a new all-time high close for the Russell 2000 and Nasdaq 100 ETF’s. The Russell has been leading the markets higher lately so this was the 6th new record close since mid-May. But it was the first new record close for the Nasdaq ETF since March 12th, almost 3 months. Breadth is expanding. But what about the S&P 500? The SPY has not made a new all-time high since January 26th. Is it dead money, stuck in consolidation? Or is it just like the tortoise slowly plodding along to overtake the rabbit later?
It may not overtake the leadership, but the S&P 500 is clearly showing signs that it is heading higher. The chart below gives some clarity. First there is the new higher high printed Monday. This adds to the series of higher highs and higher lows since the April 1st low, retesting the 200 day SMA and 38.2% retracement of the move higher since the Trump election. But it does not end there.
Momentum has held at levels supportive of a move higher, but not encouraging it. That may be changing. The RSI dipped with the market last week but is now rising and right back near a move over 60, a trigger to bulls. The MACD is positive and also slowly turning towards a cross up. Continuation gives a near term target to about 282 on a Measured Move. That would push the SPY past the March high, establishing a longer term bullish view and leaving only the January high to beat. Time will tell but the tortoise seems to be plodding along.
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