Its 180 days since we have a correction of at least 5%. Bulls are holding on to their positions, even rolling into 1700 June calls and 1800 September calls. It would take a severe down week close to turn the trend down. Look for bulls to continue to push before Memorial weekend and large POMO are scheduled next week as well. If we get a post option expiration dip it could be an early long weekend gift.
The market has seen a lot of finishes near the top of its daily range lately. When the market consistently closes near the high of the day it suggests optimism on the part of traders. This end-of-day optimism is now at a level that suggests it is overdone and there is a good chance of a pullback. The study below was last seen in the 1/16/13 blog and it exemplifies this concept. I have updated all of the statistics.
After closing 3% above the old high, it looks like we could be leaning bullish for the next half year. Could we have buy May and go away this year? In the past ten years, houses have doubled while stocks traded in a wide range, could the recent breakout lead to a lot more gains? With option expiration next week, we can hopefully look for some two way volatility. On a side note, has TSLA gone parabolic? And ARMH is on the cusp of $50.
Short-term strength is often followed by short-term weakness, but when that short-term strength is unusually impressive, it can create a situation where that extreme strength will beget more strength. When the market leaves an unfilled up gap that is considered a sign of strength. When it does it 2 days in a row and closes at a 50-day high, that can be considered exceptional strength. That is what happened on Friday, and it triggered the study below, which I last shared on the blog on 9/10/12. All stats are updated to present day.