T3’s Stock Market Wrap: Are the Bulls Sick of Winning?
Following the impressive action off last Thursday’s low, the SPX opened up and made a new record high at 2578.29.
This marked the 60th record high in the 240 trading days since President Trump’s election victory, and the 51st in 2017.
We’ve also now had 15 record highs in the last 19 days, and 21 in the last 30.
Since traders seem obsessed with comparisons in 2007, let’s take a quick look at how many record highs we had that year.
In 2007, there were just 6 record highs, mostly because stocks got so overheated before the bull market top in 2000.
But what if we cut off 2000 and all years before it?
If we do that, we get 40 bull market highs in 2007 — pretty close to the 51 we’ve had in 2017.
The Dow Jones Industrial Average and Nasdaq Composite also made record highs after the open.
This morning’s record run was basically follow-through from Japan’s Nikkei 225,which rose 1.1% after Prime Minister Shinzo Abe scored an election victory, which keeps his “Abenomics” stimulus programs in place.
The yen fell slightly against the dollar today.
The VIX hit a low of 9.94 this morning, marking the 25th straight day with a sub-10 VIX.
For some perspective, since October 6, 2014, when the CBOE changed the VIX calculation methodology, we’ve had a total of 64 days with a VIX low under 10.
Essentially, we went from having a sub-10 VIX print about once every 20 days to 24 in a row.
After the open, stocks grinded lower in a fairly orderly fashion, with the SPX finishing down -0.4% at 2564.98.
The Russell 2000 showed relative weakness with a -0.5% loss.
Unlike the SPX, Dow, and Nasdaq, the Russell has been going sideways since hitting a record high on October 5.
Some technicians believe the Russell is tracing out a bull flag:
It will be interesting to see if the Russell can resume the leadership role it held from mid-August up to that 1514.94 record high.
In earnings news, Hasbro (HAS) fell over 8% after delivering disappointing third-quarter results.
But on the positive side, Petmed Express(PETS) and Seagate (STX) rose sharply after reporting better-than-expected results.
Networking giant Cisco Systems (CSCO) announced it is buying Broadsoft (BSFT) for $1.9 billion, or $55 per share.
Chip superstar Nvidia (NVDA) posted a modest gain after Jefferies raised its target price to $130 from $180. Jefferies analyst Mark Lipacis believes Nvidia is poised to lead the neural network applications market.
Interestingly enough, while Nvidia is flirting with $200, the average target price on Nvidia is just $169.55, according to Yahoo Finance.
This morning, T3 Live Chief Strategic Officer Scott Redler said the following about the SPX:
“It’s one of those situations where they can’t keep ‘em down, so they go up. On Friday, we gapped up to make a new all-time high at 2575. There were lots of spots to adjust but it was a little tricky. It was a selective bounce without new highs from key stocks or key sectors. Now we’ll see if 2565-2568 holds as upper support this week, and if more gains get tacked on.”
With the SPX finishing at 2564.98, just under Scott’s 2565-2568 range, the market’s back on the razor’s edge.
If the bulls want to keep on winning, they better step up again soon…
Read more by Soren K.Group
