The S&P broke out in a major way yesterday, and closed at a new 2009 high of 1068.76 - which was also the high for the day (very bullish - on up volume this implies that demand was satiated and could resume pushing prices up again today). The overnights were down slightly, which implies a flat to slightly lower open. However, the market during the past two weeks has shaken off early bear strength at the open to consistently move up - so I'm not discounting that today could end up being an up day when all it said and done.
Here's how the current chart looks - feast on the bull goodness:
S&P 500 - Daily Chart - 3 Months
I don't have a whole lot to add to the chart by way of interpertation - all my usual moving average and MACD/MACD-H indicators are looking very healthy. I read in a article this morning the S&P is at it's furthest point above its 200ma since 1983. This implies extreme healthiness, although it also points to things being overbought and that a pullback/correction of some sort is due at some point - if only to bring the price movement back into line with norms.
One thing I want to point out is volume. Yesterday was gratifying in that volume rose from the day before on a strong up day. Any rally worth it's salt needs to have rising volume showing that traders are buying in in the expectation of prices continuing to move higher. However, volume as a whole hasn't really made much of an increase from its depressed levels over the summer. I would expect, for this market to really take off, that volume would increase much more than it has - we should see several days where volume is 1.5 times its 45ma - and it just hasn't happened yet (even the strong day yesterday was only 1.18 times the 45ma - and don't forget the 45ma includes most of the summer - i.e., it was 1.18 times a very low number. That has to improve for this to have legs - otherwise the implication is that the big boys really don't have confidence in a further move up and are remaining on the sidelines. Supply and demand, baby - and we have to work on demand.
For the past year+ I've been basically confining my trading to the Financial ETFs. FAS when the overall market is going up - FAZ when it's going down. Yesterday FAS returned 9+%. But can we do better?
Here's a listing of the top 10 ETFs by % return since Labor Day (the list actually includes 11 ETFs, but I discount anything that trades lower than 50000/day)
Top ETFs By % Return Since Sept 4, 2009
As you can see, FAS makes the list, but it isn't the hottest ETF by a long shot. Something wild is going on in real estate - the 3x Bull Real Estate ETF (DRN) has returned 56+% in less than 10 trading days. Wow. DRN debuted in the mid 50s in the middle of July and is now in the 150s - you do the math.
I also did a scan to see which ETF currently has the strongest MACD-H. Check this out - there's been a lot of discussion of gold in the news lately - how much have you heard about silver? Here's the chart for AGQ - an ETF that tracks silver:
AGQ - Daily Chart - 3 Months
Up 14% since Labor Day - not enough to make the Top 10 list, but still not shabby at all.
The thing that excites me about this chart is check out the volume. quiet all summer, and then totally took off once September came around. This is the type of healthy volume that I'd like to see in the S&P charts - but for now, this tells me that AGQ is maybe the place to be.
Later.