Stock Market Analysis: More New Market Highs

With all the discussion about the markets being overbought and how they are likely to reverse, the market has yet to get the message. This week we saw another bullish week as traders continued to push prices up. These moves cause the Dow Jones and the SP-500 to move to new all-time highs while the NASDAQ is not approaching the all-time high after several months of dropping.

We saw quite a few news items released this week including the Retail Sales and Core Retail Sales which came in at a surprising positive number. Core Retail Sales numbers came in at 8.4% above the expected 5.1% and the Retail Sales number came in at 9.8% well above the 5.8% expectation. These numbers show that the sales at the retail level are very strong, in fact, the second strongest numbers recorded.

We won’t have a lot of significant economic releases this next week for the US but we will see the global markets deal with interest rate announcements in Europe and Canada. While not directly impacting the US markets, they can cause uncertainty and they will likely push over and cause some markets if the reports are concerning.

With a strong market like we have right now we can sometimes forget that these bullish moves will come to an end at some point. While we don’t know when, we do know that they will happen. This means we need to continue to use proper position sizing as well as knowing where we will be exiting if things move against us. Take some time to analyze where you will be placing your stop losses to make sure they are placed appropriately.

Today we are going to look at the daily chart of the NASDAQ:

NASDAQ:

On this NASDAQ chart you can see the continuation of the trend we began about 3 weeks ago. Back then we were watching to see if it could take out the middle arrow areas and push higher. It did and last week we were watching to see if it would continue after the break of that area. The horizontal line was broken and it hasn’t looked back as of yet. The next area that this market will need to deal with is the prior all-time high. While the DJ-30 and the SP-500 have been making new highs, the NASDAQ hasn’t quite reached that level. At this rate, we may see it happen the upcoming week.

The other thing to consider on this chart is with the current upswing, it looks like it is getting close to a point where it might come down. This would be a natural move to the down side after the strong bullish move up the last few weeks. Don’t be surprised if we see the markets settle a bit before making a run to take out the highs.

Regardless of what happens, remember that we only trade what we see the chart doing, not what we think may happen.

Bill Poulos is a co-founder and the president of Profits Run, Inc. Bill started the financial publishing company in 2001 with his son, Greg Poulos. Bill has been studying stocks and investing since the 1970s. Profits Run teaches those new to stock trading how to reduce risk while making strategic investments. More than 150,000 people have been helped with their publications, software, videos, and coaching. Crypto Profit Alert, 20/30 Wealth Trader, Rapid Income Engine, Premium Income Alert, and Automatic Income Engine are amongst the products crafted by the team at Profits Run. Poulos lives in Michigan with Karen, his wife of over fifty years.