Technology Keeping The 2019 Advance Intact – For Now
In our previous July 9th update we pointed out that, despite the US stock market’s recent strength, we still had some concerns about market leadership. Specifically, since Small Cap, as represented by the Russell 2000 (RUT), had been drifting sideways since the end of February while underperforming the S&P 500 (SPX), that left Technology to take on the leadership role.
Chart 1 below shows that this is precisely what has taken place since then as the tech bellwether NASDAQ Composite Index (COMP) has spent the past 11 sessions completely above its 8133 August 2018 high — after failing a previous attempt to do so back in late October.
We view this as an emerging major bullish breakout by this market-leading index, one that will remain intact as long as the 8133 area now loosely contains the index as underlying support.
The other key factor we are tracking daily, as the COMP edges above 8133, is market internals. Table 1 below shows that, through July 23rd, all of our Asbury 6 key market internals are positive (bullish).
When all Asbury 6 are positive, market internals are the most conducive to adding risk to portfolios. At least 4 of the 6 have been positive since June 7th.
However, this by no means suggests the market is on cruise control, as safe as can be, and now all we have to do is show up in December to collect our 2019 profits. The truth is that we are now in the 10th year of a major bull market in US stocks that typically only lasts 4 1/2 years, and August and September are two of the three weakest months of the year based on data since 1957. Therefore, we continue to monitor the market very closely, with a focus on protecting subscribers and investor assets against an overdue — and potentially nasty — decline.
The video below shows how we have used Asbury Research’s analysis and strategy to manage investor assets, in real time, for our Asbury Research Management clients.
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