Once again, another correction attempt ends in a trail of tears for the bears. We were at some key inflection points at the end of last week and today burst out of the gate of the new week as geopolitical tensions ease. Other than June, 2014 has been ho hum, but a week ago Thursday the market was deeply oversold and we’ve gone vertical since – very similar to the rallies throughout 2013. The key indexes gapped up sharply a the open and never relented. The S&P 500 added 0.85% and the NASDAQ 0.97%. The NASDAQ ended above 4,508, marking the first time since March 31, 2000, that the tech-heavy index closed above 4,500 points. In economic news, the National Association of Home Builders reported its month index of confidence among those building single-family homes rose 2 points to 55, coming in better than expected.
The S&P 500 broke some long term support in late July but after a quick dip has come right back and today didn’t even care about any form of resistance. The NASDAQ broke to new yearly highs.
The NYSE McClellan Oscillator has gone straight from oversold to overbought – very similar to all the rallies of 2013.
Airline stocks – which were stars of 2013 but have struggled some in 2014 – continued to rally on the back of lower oil prices.
We mentioned U.S. Steel (X) as a potential new leader a few weeks ago as it broke out and held in during the correction – today it had a very nice move.
Solar stocks are also starting to move – while this is a niche sector – it is one to watch because it tends to run when people want to take risk.