A Euphoric Stock Market Setting All-Time Highs Built on Air
NEW YORK (TheStreet) -- Another new all-time closing high for the DJIA and the S&P 500 on Thursday. Is anyone surprised? I did not think so.
The DJIA closed up 92.02 at 17068.26 while the S&P 500 was higher by 10.82 at 1985.44. The Nasdaq climbed 28.19 to close at 4484.92 and the Russell 2000 finished up 8.65 at 1208.15.
The Russell 2000 is the only index that has not surpassed its March 2014 highs. It is very close but still a fraction away.
Thursday's holiday-shortened close had the same exact feel that the other trading days have had. The stock market was higher on air.
Time will tell, but the internal evidence, according to my algorithm process, is confirming this phenomena. The lack of trading volume is also suggesting no players in the stock market other than hedge funds. For the first time since I started time-stamping my stock trades according to my algorithm process for the world to see, which is one year ago this month, I have "0" large-cap stocks on my extreme oversold scans. That is unprecedented and a sure sign of a bubble. The amount of negative divergences within the stock indexes is another reason for concern. I will continue to point out these internal indicators. These are the indicators that will cause the downside avalanche in stock prices. So, I will continue to be extremely cautious on the buy side and use my indicators opportunistically. They all point to stocks that are extraordinarily overbought, both small cap and large cap. On Thursday I closed out the remaining short position in Twitter (TWTR) for another win and started a long position in the UltraPro Short QQQ (SQQQ). SQQQ is extremely oversold. My positions, all 760 trades, are time stamped at www.strategicstocktrade.com. At the time of publication the author was long SQQQ. This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.
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