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New All-Time Closing Highs

For weeks now these updates have been saying that objective measures of the balance of supply and demand were favorable, which implied a renewed assault on new all-time highs by the S&P-500 was very likely. This past week new closing highs were touched. The rally appears a bit fatigued, but the balance of supply and demand remains favorable toward demand over supply. These conditions imply that more new all-time highs continue to be likely, but without additional demand being added to the equation, perhaps coming from institutions being caught under-invested, any additional rally may occur in ragged fits and jerks with an upward bias?

TATY   —   A REPRESENATIVE OF A FAMILY OF STRATEGIC SUPPLY AND DEMAND INDICATORS

TATY was little changed this past week, but she did manage to close higher. This big picture strategic indicator in weekly format continues to signal a favorable balance of demand over supply. As long as this indicator forms bottoms in, or around, the red zone surrounding the 140 level the rally will likely remain intact. A “big chill” type event causing TATY to plunge into the caution zone surrounding the 115-125 level would be a warning that conditions were moving in favor of rising risks to accumulated profits, and a more prudent equity asset allocation may need to be revisited, given the history of the behavior of this indicator over the last few decades. TATY is shown in the first chart above in yellow with the S&P-500 overlaid in red and blue candle chart format.

SAMMY   —   A REPRESENTATIVE OF A FAMILY OF TACTICAL SUPPLY AND DEMAND INDICATORS

Sammy is a daily format tactical indicator with an enviable record of telling investors that the risk/reward ratio is favorable for putting excess cash to work, or initiating an intermediate trade to enhance performance. The indicator is shown above in candle format in the second chart by itself, and in the third chart with the VOO exchange traded fund overlaid. VOO is an extraordinarily low cost ETF, which tries to replicate the performance of the S&P-500. SAMMY did not flash any buy signals this past week, but investors should note that the price touched new highs, but SAMMY did not confirm setting up a very minor negative divergence. Should this negative divergence remain, or grow stronger, then it would be logical to expect some increasing volatility in the days ahead.

THE BOTTOM LINE

A series of supply and demand based indicators, which include derivative modules and NYSE data in their calculations, continue to signal that demand remains in the superior position to supply in the stock market. As long as this condition persists, investors should expect more attempts to assault new all-time highs.

The law of supply and demand is the absolute bedrock upon which all of the capitalistic system rests! Objective measurement of the balance of supply and demand is an essential requirement for appropriate, and effective management of risks, when attempting to navigate the uncertainties of the stock market.

 

DISCLAIMER: Alpha Wealth Strategies, LLC (AWS), and/ or Optimist Capital LLC, does not guarantee the accuracy and completeness of this report, nor is any liability assumed for any loss that may result from reliance by any person upon such information. The information and opinions contained herein are subject to change without notice and are for general information only. The data used for this report is from sources deemed to be reliable, but is not guaranteed for accuracy. Past performance is not a guide or guarantee of future performance. Alpha Wealth Strategies, LLC, and/or Optimist Capital LLC, and any third-party data providers, shall not have any liability for any loss sustained by anyone who relied on this publication’s contents, which is provided “as is.” AWS and Optimist Capital LLC disclaim any and all express or implied warranties, including, but not limited to, any warranties of merchantability, suitability or fitness for a particular purpose or use. Our data and opinions may not be updated as views or information change. Using any graph, chart, formula or other device to assist in deciding which securities to trade or when to trade them presents many difficulties and their effectiveness has significant limitations, including that prior patterns may not repeat themselves continuously or on any particular occasion. In addition, market participants using such devices can impact the market in a way that changes the effectiveness of such device. The information contained in this report may not be published, broadcast, re-written, or otherwise distributed without prior written consent from Alpha Wealth Strategies, LLC and/or Optimist Capital LLC.

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