Alpace

-Market Update

Running the Marathon $SPY $QQQ

February 25th, 2017 08:02

The market has seen this past short week as an opportunity for a little down time. Well, not really down time, more like a few breaths of air. You’d think Ms. SPY would be exhausted after running so hard this month, but alas she is built like a greyhound, and clearly feeling the endorphin highs as she negative splits this race. Marathon runners are taking notes for Madame SPY is a true long distance sprinter. The moment we think a dip is in tow, she pulls herself out of the water like the force of nature that she is.

Okay, okay, enough with the prose already. You get the picture. This market is strong! Crazy strong! When I look at the SPY chart I am blown away by the move over the past few weeks. And recent action has been less bearish than it was in January when I thought we could be in for a pull back. But instead the market just went sideways for a month before taking off like a rocket again. A little sideways action here this week with mostly green candles and a strong green marubozu today is hardly anything as we continue to make new record breaking highs.

While I keep hearing talk of overbought conditions, even saying it myself, I have to remind myself that overbought can remain overbought for a very long time. I also recently saw some interesting data that suggests new highs in the S&P happen in decade long clusters, and if true, we are likely to see a continuing bull market for another several years.

I also want to bring up the Nasdaq. I have heard of tech analysts talking overbought conditions in tech stocks but the index doesn’t seem to care. A slight breather this week has left us with a strong bullish marubozu candle on the QQQ today. Below are both charts.

SPY

QQQ

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I hope you all have a wonderful weekend. I am off to do my regular family weekend in the mountains after another five feet of fresh snow. Good trading everyone!

The author, Danielle Spandau is a seasoned trader/investor and educator also known as The Trading Wife.

IMPORTANT DICLOSURE:

All information and/or opinions contained herein are impersonal, for informational purposes only, and do not constitute a solicitation or offer to sell securities or investment advisory services. The views and opinions expressed in this article are those only of the author(s) and do not necessarily reflect the opinions of Alpaca. If you are considering making an investment, you should consult with an investment professional.