We are still bullish, and as you can see from our Advisor Sentiment Barometer and Market Views section, so are most investment pros. And that’s great news, as it means our contributors continue to find an array of stocks with excellent potential.
Wall Street’s Best Investments 793
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Market Views
Market is Not Overbought
The market is NOT overbought; the McClellan Oscillator is in neutral at minus 68. Key investor sentiment indicators (contrary indicators) are mixed but only slightly to moderately Bullish. No alarm here, in spite of the all-time highs in the stock markets.
The technical picture of the stock market remains superb. Last week, the S&P 500 (SPX) and the NASDAQ posted all-time highs.
However, the caveat: the percentage of stocks trading above their 50-day moving average ticked its top at 80% in late 2016, and has since peeled back to 50%. The market is advancing but 50% of the stocks are laboring.
Additionally, the NYSE advance decline line, a key to market breadth and “health,” has slid off its all-time highs posted 3 weeks ago—but not by much. The Russell 2000, (small-cap index) has likewise eased off its recent high and seems to be consolidating near its highs—no alarm here either.
I’m a huge believer in the “consumer confidence” increases to more than decade highs—bolstering and feeding the major technical breakouts that the market has experienced. Recall the market experienced stiff resistance trying, but failing (to stick) to new highs from late 2014 to November 2016. So BIG PICTURE, this is an epic technical breakout.
Dr. John Faessel, 7685 Caminito Coromandel, La Jolla, CA 92037, 858-587-8590, May 15, 2017
Stocks Still Beat Bonds
Though stocks offered better comparisons not that long ago, the payout on the S&P 500 (1.98%) is still rich when compared to current yields on fixed income instruments, and when viewed against the historical averages since we began publishing The Prudent Speculator in 1977 for U.S. Treasuries, Money Market Funds and the Aggregate Bond Index.
John Buckingham, The Prudent Speculator, www.theprudentspeculator.com, 877-817-4394, May 15, 2017
Long-Term Bullish
The NASDAQ Composite and the S&P 500 made a new all-time high today. The S&P closed above 2,400 for the first time ever.
We weren’t surprised that the market went up, but the intensity did catch us off guard.
Word was that Russia and Saudi Arabia would extend the oil production cut. This rallied the energy sector. Also, China promised a massive infrastructure program and this caused rallies in companies like Caterpillar.
The S&P 500 broke out of its trading range, but just barely. The action of the semiconductor index (SOX) is telling us that it will go significantly higher. No guarantees, but the SOX normally leads the S&P.
We are on a long term buy signal for the markets of the U.S., Canada, Britain, Germany and France.
Stephen Todd, Todd Market Forecast, www.toddmarketforecast.com, 909-338-8354, May 15, 2017
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THE NEXT Wall Street’s Best Investments WILL BE PUBLISHED June 21, 2017
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