The popular averages closed to the upside on Thursday. The S&P 500 achieved all-time intraday and closing highs.The Dow and Nasdaq finished close to record highs. Existing home sales increased more than expected in July. The Phillly Fed manufacturing index accelerated more than expected. The Markit manufacturing survey of purchasing managers corroborated that. Jobless claims declined last week. Meanwhile, the price of crude oil rose while gold fell on Thursday.
Above is my 3-month chart of the S&P 500 exchange traded fund (SPY). It was soaring in February following a January pullback. After a new high was recorded in early April, another drop occurred as newsletter writers were warning people of a bubble that could burst. That April drop beneath the 50-day moving average was quickly erased. Money moving out of stocks and into bonds led to more tests of that moving average before a nice rise to record highs commenced.
The down-thrust amid high trading volume on July 31 shoved the SPY beneath its 50-day moving average. That caused my outlook arrows to retreat to neutral. During the week-before-last the price move alternated each day with the net result a slight gain and repainting my weekly arrow green. On both Thursday and Friday last week the SPY closed virtually at its 50-day MA. That allowed my monthly arrow to join my weekly arrow. The sharp move above that level on Monday sounded the all-clear for all of my time frames. The continuation this week has been reassuring.
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