The uptrend in U.S. stock market that began in early June remains intact. Those of you that follow regularly my updates know that I turned bullish more than two weeks ago. And on the daily chart (our Short-Term updates) I turned bullish but couldn’t find a way to enter long. On the hourly chart of Nasdaq 100 however, I turned bullish on Fri, Aug 3rd at 2665 level and this strategy is now more than 110 points in profit.
There are many stocks that look quite bullish right now. A good example of the strength of the current rally has been the recent price action in Apple. The stock gapped down on July 25th after a negative earnings surprise but since then has been trading higher and recently has moved to new all-time highs. I have discussed this type of behaviour with you before: when a stock which is in a strong uptrend gaps down, usually this gap is used as a buying opportunity. Because rarely an uptrend can reverse on a negative news. This time was no different and Apple is now one of the leading stocks on the way higher. The stock market now looks bullish so I expect the current upmove to continue well into September as well.
However, there is one sign that the current rally is not broad-based. Last week as the U.S. indexes were moving higher to new highs, the emerging markets behaved quite differently. Actually many of them pulled back or consolidated their previous gains (China, Russia, Turkey) and did not moved to new highs. When the emerging markets are lagging, that’s not a good sign overall. I just want to remind you that the emerging markets topped out in early March this year and a month later the U.S. stock indices did the same. And I continue to believe that the emerging markets are the leading indicator and if they top out now (or in the next few weeks), then the U.S. stock market average will do the same within a month or so.
Trade With The Trend!
Alexander
Trendrecognition.com
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