Nuevo comentario , en este caso de Matras ....

[H. LEIN]

Freak Out or Break Out?

Thursday finished at 1892 on the S&P. That is the second highest close in history. And yet many investors are running scared.

Why?

Because each time we have previously gotten to this neck of the woods, the market has freaked out. So many assume that will happen again.

Yes, the freak out scenario could come true this time around. But we keep floating up to this 1900 level for a reason which is that the fundamental basis for a bull market still exists.

Freak out or break out is a coin toss this time around. As the year rolls on, and fundamentals stay positive, then the odds of the break out above 1900 increases. My money is riding on that bet.

[chaval]

¿Fliparse o escaparse?...................................................................................................

Fliparse o escaparse es un lanzamiento de moneda todo este tiempo. Mientras el año va avanzando, y los fundamentales permanecen positivos, entonces la opción de escaparse por encima de 1900 se incrementa. Mi dinero corre en esa apuesta.

[kostarof]

gracias lein y como siempre a tener en cuenta pero sin levantar la guardia por los niveles donde estan

[H. LEIN]

The Answer Is...

In my last commentary I postulated whether the market would break out above 1900 or freak out by heading lower. On Friday we may have gotten our answer with the first ever close above 1900...barely.

But it's not a done deal.

One close above 1900 does not a break out make. We need to stay above this point for a while to have any real confidence. However, if you wait too long, then you will miss the train.

I like the odds of the break out happening now. So I am locked and loaded at 114% long (thanks to some leveraged ETFs). Feel free to join me.

[H. LEIN]

Economic Trifecta Fuels Breakout

Stocks wasted no time breaking out further above 1900. It was hard not to be bullish when there were 3 fresh economic reports flexing their muscles:

1)   Durable Goods up +0.8% versus -0.8% expectation.

2)   PMI Services Flash report jumped to 58.4 from a prior reading of 54.2.

3)   Consumer Confidence of 83.0…the second highest reading since the Great Recession.

Even better was having small caps taking the lead after a downright miserable performance year to date. This is a very healthy sign as more aggressive stocks should be winning as the market makes new highs.

The technicians in house point to 1920 as a point of key resistance. Once above, then may not be hard to press towards 1950 or even 2000 before the next extended consolidation period.

[Rober]

Ojalá se cumpla !  Así el Ibex también acompañará.

[H. LEIN]

Brace Yourself

Thursday may bring a shocking headline. So best that you brace yourself for it now. I am talking about that Q1 GDP is expected to be revised down to -0.5%...Yes, a negative reading.

How can that be while stocks are making new highs?

First, because the 2 previous quarters were very robust and it stole some growth from Q1. Second, the bad weather across the country hurt a lot of economic activity. Third, the market is forward looking. And in that regard, most economic indicators are spiking now with Q2 GDP expectations around +3%.

It is this last part that is keeping stocks aloft. And they will likely stay aloft until the signs of the next recession which are currently nowhere to be found.

[H. LEIN]

Say What?

Yes you heard correctly. GDP actually fell -1% in Q1 and yet investors responded to that news by running stocks to new highs at 1920.

The reason it was so easily dismissed is because the market is forward looking. So this is discarded as "old news" . Looking ahead investors expect a +3% showing for GDP in Q2. So that is why the bull continues its stampede.

The chartists in house are saying there is an important Fibonacci extension level at 1921 that will serve as stubborn resistance. That may create a temporary pause, but the long term bull market is in place til proven otherwise. So best saddle up and ride it out.

[esetio]

mas claro el agua....