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Tuesday, November 22, 2016

Daily update 11/22 Mixed Signals from Labor Market

Dow hits 19000 for the first time and SPX hits 2200.

A hanging man doji bar.  SPX would have to close below today's low for it to have any important meaning..  Breadth was +67%.  New highs were 267 and new lows were 18.  Volume was up a little bit.  It felt like the bulls had a mission in mind to get to 2200. 

The high in the futures came overnight before the open.  After a morning sell off, the bulls showed up and pushed prices back to the intraday high.  The range continues to be very narrow though. 

Despite the record high close the green count actually slipped a bit.  It is still not showing the kind of strength usually seen on a strong break out.  Very odd.

The small cap stocks are leading the way here.  The curious thing about that is the R2000 index was the most overvalued of the broad based indexes.  I called it a bubble valuation like two years ago when it hit a P/E of 75.  It no longer has a P/E because earnings have gone negative.  Very comforting isn't it.  Every 1000 points since the Dow hit 10000 has usually seen some consolidation or pullback when first touched.  That happened when the Dow hit 18000 in Dec. 2014.  It ended up pulling back almost to 17000.  I see no reason why it would be different this time.  If anything there seems to be some good fundamental reasons not to go higher from here.  I think I have covered those pretty well.  I guess we will see if it is different this time or not.

Here are some interesting charts on the state of the labor market.  Mixed Signals from Labor Market


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