While the major indexes pushed to all-time highs over the prior two days, odd divergences were beginning to crop up yesterday. The first was breadth, which, despite all three of the major market indexes finishing positive on the day, came in at roughly 1.5 to 1 negative on both the NYSE and NADAQ Exchanges.
The second divergence was the fact that both of the broader NYSE Composite and Russell 2000 Indexes, were down on the day. This sort of action will tend to bring the bears out of hibernation, but I’ve seen this type of divergence occur several times in this market on the way up. Usually, it leads to at least a market pullback, but since the election all pullbacks have been buyable pullbacks, at least in the right stocks!
So we can see that last week’s pullback in the NASDAQ Composite Index was yet another one of these buying opportunities as it inexorably trudges to yet another all-time closing high on higher trading volume.
The rest of this report is available for Gilmo Report Members only.The full report will be available 45 days after it is posted. For immediate access: login
Gil Morales & Company, LLC (“GMC”), 8033 Sunset Boulevard, Suite 830, Los Angeles, California, 90046. GMC is a Registered Investment Adviser. This information is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to GMC, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Gil Morales & Company, LLC. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2008-2017 Gil Morales & Company, LLC. All rights reserved.