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February 21, 2015 – Weekend Market Comment

February 21, 2015 – U.S. stocks rallied on Friday to close at highs on an eleventh-hour resolution between Greece and its creditors in the euro zone. The Dow Jones industrial average closed up more than 150 points, its first record close for 2015. The S&P 500 ended the week at its third record close for the year. The Nasdaq also closed higher, within 50 points of the key 5,000 level.

The Dow Jones Industrial Average closed up 154.9 points, or 0.86 percent, at 18,140.70, with Procter & Gamble the greatest of five laggards and Boeing trading at all-time highs (since 1952) to lead blue-chip advancers. The S&P 500 closed up 12.85 points, or 0.61 percent, at 2,110.30, with health care leading gains across all sectors except energy. The Nasdaq closed up 31.27 points, or 0.63 percent, at 4,955.97. Two stocks advanced for every decliner on the New York Stock Exchange, with an exchange volume of 734 million and a composite volume of 3.1 billion in the close.

What I Think
Looks like the agreement ... was already "baked" into the market. Not much of a surprise here. The real issue is that this agreement only gets them to the next big debt maturity which puts them back at this all over again. A kick the can down the road for now. I think this market still has legs ... as long as corporate earnings stay positive. Obviously the safe haven money is exiting the bond market and has no place to go but into stocks.

It All Shows Up In The Charts . . . 

Bull Bear Lines

Nice bounce and the bull continues, I do see that we are a bit ahead of ourselves and a small pull back would be ok. Notice the bounce in Slope... this could be another long term up trend. 

Primary Sell 
Clearly the market pros are now embracing this rally. Also looks like a bit of room to run.

Aggressive Defensive Graph
The Slow Stochastics on the top of the graph has hit a new peak now black over red, Clearly aggressive equities are in play but perhaps already over done.

Bond vs Equities
Equities (stocks) outperform bonds this week. Risk on week.

S&P500 Over 50 Day
The percentage of stocks over the 50 day moving average is on rising as the market buy the dippers gobbles up bargains. As you can see we are probably a few weeks from a topping out.

Green Arrow Graph
Our Green arrow graph recently drew a new green arrow, when the time was ripe for market entry. As you can see great timing. 

Nasdaq Summation
The Nasdaq Summation index shows that is is good time to be in high tech Nasdaq stocks. Full on bull run.

NYSE New High Low
Still showing strength on the big board.

Great to see safety stocks particularly utilities decline and the new leader is consumer discretionary and the high tech stocks of the Nasdaq.
XLF - Financial Stocks - Dark Blue
QQQ - Nasdaq - Purple
XLY - Consumer discretionary - Green
XLU - Utilities - Red
DEF - Defensive stocks - Brown

On Balance Volume is now keeping pace with the current market showing that institutional large volume buying is returning. It looks like the "smart money" was late to the party this time.  

The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 14.

What Works Now
Well if Europe is happy that geraly bodes very well for Germany, conciser the Germany ETF symbol EWG.

There are two interesting articles in the Economist magazine this week, one says it is time for India to shine and the other says it is getting hard to hire programmers. Well you could buy this company that outsources programing jobs to India ticker CTSH. 

This week went sideways as the big fund money waited to hear the final call on Greece. Now they are buying up the market. As one of my readers you have been long for a couple of weeks and you are enjoying fantastic gains. 

It is minus 13C in New York, plus 4 in London, and plus 27C here in Belize. Well I am off to convert my market gains in to rum on the dock while I glance lazy eyed at the Caribbean and work on my golden brown tan. 

You can learn more about my indicators by visiting the CME4PIF school by clicking here.