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July 5, 2014 – Weekend Market Comment

July 5, 2014 – This week the Dow broke through 17,000 for the first time, helped by strong US jobs figures and reassurance that the Federal Reserve will not raise rates to pop asset price bubbles.

Many fresh economic indicators reported last week and they were very positive. Positive numbers a good for a long-term up trend in the stock market. The S&P 500 hit new highs in late February, early March, early April, late May, June and early July. In other words, the S&P 500 has pretty much been marching forward the entire year. ISM Manufacturing and ISM Services were both above 55. Anything above 50 is supports economic growth and readings above 55 are quite strong. Second, auto sales hit 16.98 million units (annualized), which was the highest reading since July 2006. Also the employment numbers were strong. The unemployment rate, at 6.1 percent, is the lowest since September 2008. A year ago, it was a whopping 7.5 percent. This fits in perfectly with the gradually expanding economy that has been the backbone of the stock market rally. The ADP private payrolls data on Wednesday saw the biggest jump since November 2012. On a related note, pending home sales are up 6.1 percent. Even though the stock market may seem overbought and ripe for a correction, these economic indicators clearly support a long-term uptrend in stocks.

Of course the Long Term Bull and Bear are still very bullish. Learn how this works click here.
(as always click any graphic to enlarge it) 

The NASDAQ market is full of tech and small cap stocks and they are doing very well as shown by the summation index.

The VIX is hitting new lows, I got cute and bought some VXX as a counter trend move, dumped that in a hurry. See I make lots of mistakes too. 

The Primary Sell is Backing off from giddy heights, indicating a little common sense is returning to the market slowly. Learn how this works by clicking here.

The percent above 50-day overbought indicators are still looking toppy. Learn to how that works click here.

What Works Now
As I mentioned consumer and Tech are doing very well the green line pulling ahead is consumer discretionary. 

Just look at a stock that is a bit of both Apple

Still loving Tripadvisor my top aggressive stock pick up 27.5% in 3 months. Yowsers.

Yes happy to be in Canadian Bank -- Bank of Nova Scotia and it has a dividend too.

CIG Energetica de Minas Gerais the Brazilian power company is hard to say but great time this week, it had a nice bounce to end the week and sports a 7% + dividend. 

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