DAY HAGAN TECH TALK JULY 23, 2018
Between August 2017 and January 2018 (22 weeks), the S&P 500 (SPX/2801.83), Russell 2000 Index (RUT/1696.81) and the NASDAQ (COMPQ/7820.20) gained approximately 19%, 20% and 21% respectively. As a result, their respective chart configurations took on an almost parabolic (straight up) shape. As a consequence of this sharp price move over a relatively short time period, there is nothing, in my opinion, sinister about the multi-quarter lateral price action taken on by the large cap universe. Wall Street participants would benefit from maintaining an unemotional investment process where risk management (cutting losses and taking profits) and patience are of extreme importance.
When viewed from the perspective of “New 52-week highs,” the domestic equity market has narrowed. However, while this indicator partially helps discern the equity market’s internal backdrop, it is not a good timing indicator. When viewed from a different perspective (first chart) I don’t think the Large Cap domestic equity market is being driven by just a handful of stocks.
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Art Huprich, CMT
Chief Market Technician
Day Hagan Asset Management
—Written 07.22.2018. Chart sources: Stockcharts.com.
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