Stocks had a big day despite a midday pullback in what appears to have just been a gap fill. Perfectly fine by me. The performance of the equity market was powerful on June 20 and could not have been more perfect. The index managed to open about 1% higher and saw nearly all of it evaporate midday on Iran worries. Still, stocks managed to recoup all of the midday pull back to finish near the highs.
I continue to believe that this a market heading significantly higher in the coming months. Valuations based on future earnings estimates continue to remain reasonably low. Although they are rising, we should continue to see investors climb the ladder of risk looking for earnings growth and as a result, will be more willing to pay higher multiples for that growth. If I have one complaint about today’s rally, it was the lack of participation by the Russell and the biotechs. However, both have had a strong performance this week, and one day of underperformance is not much to worry about.
Believe it or not, Amazon did not have a great day, rising to roughly $1920. The stock is inching closer to our $1960 target.
Very quietly, Alphabet has climbed above $1,100 filling its first big gap. There is a still that huge gap up 1,300 that needs to be filled too. That may take a while longer.
Cisco managed to close above resistance at $57.25 for the first time on June 20. It could the first significant step on a path towards $70.
GE looks as if it could make a move higher towards $12.35, as it breaks a long-term downtrend and resistance at $10.60
Apple continues to hold support around $198.50, and I still think it goes to $209.
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