STTG Market Recap September 4, 2014

U.S. indexes jumped this morning as the European Central Bank once again cut interest rates and stayed positive most of the session, but experienced a dip in the final hour to close in the red.  The S&P 500 fell 0.15% and the NASDAQ 0.22%.   The ECB lowered its benchmark interest rate to 0.05 percent, and cut its deposit facility to minus 0.2 percent.  There was also a booming economic report out of ISM.

The Institute for Supply Management said its services index rose to 59.6 last month from 58.7 in July. The August reading was the highest since August 2005 and topped economists’ forecasts for 57.5, according to a Reuters survey.  A reading above 50 indicates expansion in the sector.

Indexes are still fine.

spx

nasdaq

We have a negative reading on the NYSE McClellan Indicator for the first time this rally.  Now this need not be negative – we can see a quick bounce back to zero or weeks of a mild rally while it stays negative.  That has happened in the past.  However, if it remains negative for the next week or two it generally means there is weakness creeping in and it makes the market more prone to corrections.  A sweet spot for this reading is generally +10 to +40.

nymo

Shares of BP Plc (BP) fell 5after a U.S. district judge ruled the company was “grossly negligent” in a massive oil spill in the Gulf of Mexico in 2010.

bp

Costco’s (COST) August sales at stores open at least a year climbed 7 percent, which was much better than industry watchers had expected. Analysts polled by Thomson Reuters had been looking for an increase of only 4.8 percent.

cost

We are still seeing good strength out of the airlines – United Airlines (UAL) jumped today.

ual

GoPro (GPRO) finally took a much needed rest after a parabolic move the past week.

GPRO

Some interesting data out of Bespoke Investment on this amazing rally.

With the S&P 500 hitting yet another new all-time high today, the current bull market that began on March 9th, 2009 has crossed the 2,000 calendar day mark. For reference, a bull market is a rally (closing basis) of at least 20% that was preceded by a drop of at least 20%. A bear market is a decline of at least 20% that was preceded by a rally of at least 20%.

Below is a table of the historical bull markets that the S&P 500 has experienced going back to 1928. As shown, the current bull market now ranks 4th in terms of length. It needs to last another 244 days to pass the third longest bull market that ran from 10/3/1974 to 11/28/1980.
The average bull market for the S&P 500 lasts 933 days and sees a rally of 105.3%. At 2,005 days with a gain of 196.4%, the current bull market is just about double the average both in terms of gains and length.
     Bespoke Bespoke2

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