Stocks rallied further last week with more indexes ending at new closing highs. Many show new records while the NASDAQ highs are from 2000 … Indicators are bullish but also overbought with many at prior highs. The quick recovery from June’s selloff was hard to ignore and more newsletter editors turned bullish. That figure would have been even higher except for a few shifts away from that outlook from advisors who noted negative divergences with the new highs.
With the third consecutive higher reading the bulls were 52.1%, from 46.9% a week ago and their 2013 low at 41.8% two weeks before that. With many indexes quickly back to highs the quote ‘don’t fight the tape’ [or Fed] was repeated more than once. After a 10.5% increase the bullish reading is approaching its mid-May high of 55.2%. With the averages at or above readings from that date the bulls could increase further and reenter that danger level [55% and above] that suggests close to fully invested exposure. That was last shown at the April 2011 peak.
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