Close But No Cigar

The market started the new trading week with a bang. The SP500 took off to the all time high territory but failed to close with a new high. The tech sector Nasdaq continues its upward march and closed with another new multi-year high. The Russell 2000 finally caught up with the other indices and only a few points away from its all time high. The DJIA was the weakest link. Although it closed up more than 100 points, but it is still nearly 370 points away from its all time high.

The breadth of the market clearly signaling there is a higher high coming. The market does not hide its intention only hides how and when it will achieve what it is intended to do. But looking at the inverted hammer candle printed by the SP500 today, it should not be a surprise if a short term pull back appears before another attempt at the new all time high. Historically, February is one of those months the market has the tendency to put in a top or a new high. Let see if this is one of those occasion. No, I am not calling the top, I believe there is at least another new high before this market tops out. I am just raising the flag to be on the alert. I will continue to trade defensively on the long side.

Here are the updated charts for the indices (click on the chart to enlarge).

SP500



DJIA



NDX



RUT