The Technimental Take

While the SPX has continued to push into new high territory, the Nasdaq has not yet reached its May highs. The chart above shows that the COMP needs to get to 2375 to match those highs. I think it will get there, and then go on to make news highs as it plays catch-up to the SPX.

Normally, I would expect some sort of consolidation along the way. And I still think there is a good likelihood of said event. But I am starting to believe that there is an increasing change that the market could experience a "melt-up", as performance anxiety reaches a cresendo. If so, any pullback would likely occur from much higher levels, and it would not make sense to wait for it.


Looking at the sentiment indicators last week, I was shocked to see the AAII bull/bear spread move back into negative territory (-9%), despite the market making new highs. As I said, no one seems to be embracing this rally. The spread on Investor's Intelligence, at +16%, is also well below levels seen at previous market highs.

Here are a few other supporting factors:

• The Rydex Nova/Ursa ratio is still low at 0.111
• The Public short ratio matched it's record high at 64%
• The 10-day ISEE index is still very low at 114

I continue to look for near-term opportunities to put more money to work. Growth stocks continue to break out and should lead the market into year-end.