LET'S GET THE PARTY STARTED – SP 500 CLOSED ABOVE 2,000

Never comes the perfect set-up point when the market like now is in full steam ahead. Almost without any consolidation and correction all US and European indices have been gaining day by day and all benchmarks are moving forward. I wouldn’t say the party just got started, but there is still room for more gains in indexes.

Tuesday ended stock markets higher again. S&P 500 closed first-ever above the 2,000 milestone level and touched the intraday record at 2,005. Finished 30th record close this year and gained YTD 8.2%. DJIA touched intraday record at 17,106, but closed lower just about 16 points below all-time high. Nasdaq had highest close since March 31, 2000 again.

• DJIA: +0,17%
• NASDAQ: +0,29%
• S&P 500: +0,11%
• RUSSELL: +0,85%

The Russell has been leading the gains this month, the best performer between US indices. We have built huge positions in Russell in July and have been overpositioned in that index.

The S&P 500 hits a new high, but what is the outlook? In terms of technical side hard to forecast because the chart is in a white and uncovered territory. What we can do in these situations just hold the long positions until the bullish trend and momentum are not violated. When does it come? I don’t have a faintest idea.

The index easily could back test the 1,993 key support level. Don’t be scared if that happens that won’t be a disaster, the bullish trend is still intact. Normally we don’t forecast, but now there is a temptation. We are expecting the S&P 500 is going to finish the year at least at 2,050. Why are we optimistic? Just look around in the world and you will realize US seems to be the only safe place right now geopolitically and the investors love the complacency. And, the retail market is still dead the lack of enchantment with the Wall Street could bring more gains ahead as many small investors come forward.

The BFM Assets Team.