The S&P500 is pennies away from a 9th straight week without a pause. SPY shows various signals worth noting, especially as it realtes to buying by institutions. Previously this rotation was evident in TICK cumulative, which continues to rise. And, the only way that can happen is when institutions are “cumulatively” buying more on the uptick and they are selling on the downtick.
“The caveat is still bond yields (JNK,HYG,) and the flattening yield curve.”
We also have block size trades below pre-market price action, which showed support on Thursday, when prices rose back through these levels. This action was apparently due to the House Ways and Means Committee results on the Tax Bill passing. A close above the upper band of blocks 258.50 (+/-) would create a 9th week without a respite for the index.
Sales and earnings continue to beat estimates, so the potential for the week to close green is still within reason. We note the USD, middle panel, appears to be turning. If that should happen, the reaction would be bullish. The December pivot 103 (+/-) from highs has helped the indices over the following 11 months.
Whether we continue higher or not, it seems reasonable to stay cautious in the short term. The probability of a move lower only increases, with each move higher without a rest. Earnings season is almost done.
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