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Millionaire Now! by Larry NusbaumThis blog is based on the organizational principles found in my new book, "Millionaire Now! - A Financial Toolbox with Seven Steps to Wealth". |
Several Major Indices Reach New All-time Highs
Posted on 12/05/2006 19:05 PM | Link | Post Comment
The major averages kicked off the week with a bang, many rising to fresh 52-week highs. However, the volume totals on the exchanges were about average and below Friday's levels. Breadth was positive as advancers led decliners by better than a 3-to-1 ratio on the NYSE and by better than a 2-to-1 margin on the Nasdaq exchange. The total number of new 52 week highs again outnumbered new 52-week lows by a wide margin on both exchanges. In fact, on the NYSE there were 475 issues that hit new 52-week highs while only 6 stocks hit new 52-week lows.
The major averages blasted higher, promptly rebounding from last week's distributional action. Growth investors were pleased to see leadership emerge in small and mid cap stocks. The Small Cap Russell 2000 Index and the Mid Cap S&P 400 Index broke out of a small three week consolidation area and enjoyed their best closes ever! Strength was also found the benchmark S&P 500 Index, which also cleared a small consolidation area and notched its best close of the year. Impressive buying demand additionally sent the NYSE Composite surging to its best all-time high close. Meanwhile, the tech-heavy Nasdaq composite and the blue chip Dow Jones Industrial Average did not quite manage to breakout to new highs, however their gains left them just shy of their best closes of the year.
Financial stocks were among Monday's pace setters to the upside as the Broker/Dealer ($XBD +2.59%) and Bank ($BKX +1.70%) index tallied solid gains. The tech sector also was a positive influence on the major averages as there were gains for the Semiconductor ($SOX +1.97%), Software ($GSO +1.64%), Biotechnology ($BTK +1.35%), and Internet ($DOT +1.33%) indexes, followed by smaller gains by the Networking Index ($NWX +0.55%). The Retail Index ($RLX +1.24%), the Healthcare ($HMO +0.89%) group, and the Gold & Silver Index ($XAU +1.15%) also contributed to the market's positive bias. Meanwhile, energy issues were laggards as the Oil Services ($OSX -0.60%) and Integrated Oil ($XOI -0.27%) indexes ended lower.
Market Expectations from Dr. Brett:
"My measure of upside momentum (Demand) to downside momentum (Supply) rose on Monday to 149:27. Recall that this measure tracks the number of stocks closing above their volatility envelopes vs. those closing below. We're seeing the number of stocks with strong upside momentum outnumber those with weak momentum by more than 5:1. In general, we tend to be more likely to see upside follow through 1-5 days out following new highs with broad participation vs. new highs with weak participation.
The number of S&P 500 stocks making fresh 52-week highs rose nicely to 65 on Monday, although that remains below the 80 level recorded about two weeks ago. Among the S&P 600 small caps, new highs were 56, down from a little over 80 two weeks ago. As long as we make day over day highs and expand the number of stocks making new highs, the short-term trend has to be considered bullish.
Note that this rally has actually broadened. The Russell 2000 made a new high on Monday, but the Dow did not. In general, weakening markets don't broaden to the upside."
The major averages blasted higher, promptly rebounding from last week's distributional action. Growth investors were pleased to see leadership emerge in small and mid cap stocks. The Small Cap Russell 2000 Index and the Mid Cap S&P 400 Index broke out of a small three week consolidation area and enjoyed their best closes ever! Strength was also found the benchmark S&P 500 Index, which also cleared a small consolidation area and notched its best close of the year. Impressive buying demand additionally sent the NYSE Composite surging to its best all-time high close. Meanwhile, the tech-heavy Nasdaq composite and the blue chip Dow Jones Industrial Average did not quite manage to breakout to new highs, however their gains left them just shy of their best closes of the year.
Financial stocks were among Monday's pace setters to the upside as the Broker/Dealer ($XBD +2.59%) and Bank ($BKX +1.70%) index tallied solid gains. The tech sector also was a positive influence on the major averages as there were gains for the Semiconductor ($SOX +1.97%), Software ($GSO +1.64%), Biotechnology ($BTK +1.35%), and Internet ($DOT +1.33%) indexes, followed by smaller gains by the Networking Index ($NWX +0.55%). The Retail Index ($RLX +1.24%), the Healthcare ($HMO +0.89%) group, and the Gold & Silver Index ($XAU +1.15%) also contributed to the market's positive bias. Meanwhile, energy issues were laggards as the Oil Services ($OSX -0.60%) and Integrated Oil ($XOI -0.27%) indexes ended lower.
Market Expectations from Dr. Brett:
"My measure of upside momentum (Demand) to downside momentum (Supply) rose on Monday to 149:27. Recall that this measure tracks the number of stocks closing above their volatility envelopes vs. those closing below. We're seeing the number of stocks with strong upside momentum outnumber those with weak momentum by more than 5:1. In general, we tend to be more likely to see upside follow through 1-5 days out following new highs with broad participation vs. new highs with weak participation.
The number of S&P 500 stocks making fresh 52-week highs rose nicely to 65 on Monday, although that remains below the 80 level recorded about two weeks ago. Among the S&P 600 small caps, new highs were 56, down from a little over 80 two weeks ago. As long as we make day over day highs and expand the number of stocks making new highs, the short-term trend has to be considered bullish.
Note that this rally has actually broadened. The Russell 2000 made a new high on Monday, but the Dow did not. In general, weakening markets don't broaden to the upside."
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