I generally do not view arguing with the market as a productive use of time. To me, it would be like arguing with the ocean. Imagine standing on the beach as the tide rises, with each wave crashing closer to where you’ve decided to place your chair, and yelling at the ocean, "You should not come this close."
The S&P 500 closed the week at record levels, confirmed by breadth and intermarket themes. The tide is rising, and it’s hard to see it any other way. It’s even harder to look at this market and “tell” it that it should be doing anything else.
S&P 500
As stated above, the index closed the week at a new high, above a steadily rising 60-week moving average. While it may be tempting to try to be the hero and call a top, history has shown time and again that such calls have a low probability of success.
Source: Optuma
NYSE Advance/Decline Line
On the daily timeframe, the NYSE Advance/Decline Line is trading near all-time highs, signaling that the underlying health of the market’s price trend is solid.
Source: Optuma
Credit Spreads
The High Yield Option-Adjusted Spread (OAS) measures the difference between "safe" Treasury bonds and "risky" high-yield bonds. The spread tends to widen in times of stress. Currently, it sits below the declining one-year moving average and near the lows of the past decade.
Source: Optuma
High Yield Bonds
A simpler way to view high-yield bonds is through the trend in the SPDR Bloomberg HY Bond Fund (JNK). On a total return basis, the fund is trading near all-time highs, above a rising 200-day moving average.
Source: Optuma
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