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July 19, 2014 – Weekend Market Comment

July 19, 2014 – A strong rebound on Friday helped U.S. large cap stock indexes end the week higher. The Bull Bear lines are still intact and so we are still in a bull market. The week's strongest gainers were the Dow Industrials (+0.92%). The Dow also remains above its January high near 16,600. Friday's up volume was slightly less that Thursday's down volume. But the week's volume flow was generally positive. The same is true for the Nasdaq and S&P 500. The Nasdaq gained +0.38% on the week. A long hoped for improvement in the economy appears to be manifesting itself in second-quarter U.S. earnings, but the next two weeks could be the real test. Companies such as General Electric and Intel have reported solid results. In addition, GE believes now is a ripe moment to spin off its private label credit card division in the hopes growing consumer demand will make it more attractive.

In addition, 68 percent of S&P 500 companies so far are beating analysts' profit expectations, above the 63 percent long-term average, according to Thomson Reuters data. A similarly high percentage of companies are beating revenue forecasts.

Still, it's easy to overestimate the excitement. Many of the early reporting is by financial companies, not always the best barometer of Main Street activity. The next two weeks, however, will see 60 percent of the S&P 500 release their results. That is key for investor looking for confirmation the anticipated economic rebound from the first quarter is more than just weather related.

That said this is not yet the time to put new money to work and I would remain conservative.


The NASDAQ summation index still shows weakness .


The VIX is weak . . . could easily turn up from here


The Primary Sell indicators tells you the pros on wall street are not buying yet either. (click here to learn how to use this graph)



Look at Market leaders like Under Armour and Tripadvisor.... weak



So I would remain on the sidelines yet, despite a strong rally on Friday....



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Yet another parabolic up week for the markets. Honestly folks valuations are really stretched here. The air is so thin at this altitude. Then again the markets can and do (on a short term basis) anything they want. Still I would expect a little pull-back in the next two weeks.


Lets see what is in the charts this week:

CLICK HERE: To see the 100 and 200 series charts



101 Bull Bear Bull market (dark green over red) and now the short term (light green) is up sharply. Also note the dark green 50 day average is in a firm uptrend. NOTICE THE SLOPE (second window), this could be part of a new long term uptrend.Bull market -- expect bullish outcomes…