Healthy Index Activity Day After Easter Sunday

Wall Street 

Today after the bell, we have the S&P 500 ticking slightly up from $2898 to $2903.

The Dow Jones Industrial Average, meanwhile, has stuck opening at around $26,510 then troughing and spiking and going back to that baseline around 10 o’clock.

However, the broader context here is that these index indicators are near record all-time highs.

At $2900, the S&P 500 is already neck and neck with its all-time high last year.

The Dow Jones is also nearing its all-time high mark of $26,800 back in the early fall of 2018.

Savvy investors who have been around a while remember when Dow $14,000 was an unimaginable high mark, and then later when the Dow broke $20,000 several years ago after falling down to a dismal $8000 after the financial crisis

Today, as Zacks analysts note the potential for all-time highs, they also note positive indicators such as evidence of a trade deal with China, and good earnings reports which have brought markets to their current green level. The S&P 500 is up over the month, and the Dow is similarly positioned.

The renewed optimism came from easing recession fears following rounds of upbeat economic data and enthusiasm over trade deal,” write Zacks experts. “Additionally, Q1 earnings are coming in better than expected with improving outlook.

Earnings from about 15.4% of the total market cap in the S&P 500 Index that has reported results are up barely 0.2% on 2.5% higher revenues. While the growth is much lower than the earnings and revenue improvement of 13.9% and 5.4%, respectively, for the same group of companies in the preceding quarter, it is much better than what many had feared.”

Zacks also uses something called the Value Line Geometric Index to measure market success.

The breadth of the market — the number of companies climbing rather than falling to rent peaks or troughs — has been improving, as measured by the Value Line Geometric Index,” analysts write. “The measure is still about 7.6% below from its all-time high hit on Aug 29, but was up about 23% since its late-December low. This metric also supports the bull thesis.”

In addition, Zacks analysts provide a set of Exchange Traded Funds as options for investors who want to buy in on the rally.

All of this is positive news, but we urge traders to do the research and balance all of the new green this spring with the warnings of seasoned evaluators like Alan Greenspan in suggesting that the market only has so far to run before significant corrections happen. Adjust your long-term and short-term trade strategy accordingly.