If this is a head fake, it sure is an elaborate one

It can’t possibly be. Companies are missing on revenue left and right. Economic data is coming in looking like ass. The Fed is hellbent on getting a rate hike in.

And yet, a new record high for the NYSE Composite as the week closed out. A setup that could portend the next leg higher after 10 months of consolidation. How? Why? Is it a trick? A ruse to suck in the last holdouts? Is this the thrust that pulls in the remaining Hussman AUM?

If the breakout is a head fake, it certainly is an elaborate one. Consider that the NYSE Composite is made up of over 2000 securities – all of which meet the stringent requirements of listing on the exchange. The index is comprised using a free-floating market cap methodology, so it’s broad and deep. And it’s just taken out resistance at a highly improbable moment if you’re reading the latest headlines. Relative strength is confirming. This thing wants higher:

nya

Also whipped up the below cumulative NYSE Comp advance/decline chart, which has already broken out, thanks in part to the foreign stocks and REITs that are leading ahead of the S&P this year:

nyaddddddd

So yes, it could be a trap. But if it is, someone should tell all the freely-traded issues involved to stop going higher.

 

 

 

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here: https://www.ritholtzwealth.com/advertising-disclaimers

Please see disclosures here.

What's been said:

Discussions found on the web
  1. wigs commented on Jan 22

    … [Trackback]

    […] Information to that Topic: thereformedbroker.com/2015/04/26/if-this-is-a-head-fake-it-sure-is-an-elaborate-one/ […]