As for the stock market specifically: The summer doldrums haven’t arrived yet on Wall Street. The good news is that the wind is supporting higher prices, including records for the Nasdaq Composite and S & P 500.
A few people told me in various terms that they liked my television advice for last week, so I will repeat it.
Don’t watch television this week because its only a role reversal as to which side is great, and which side is evil.
The risk assessing bullish percent indicators lost a bit of ground last week, but are not in danger of reversing. For those who remember my white board presentations, you might notice that we almost hit the 70% level on the NYSE Bullish Percent level. Bear in mind that reaching the 70% level does not mean we immediately run for the hills. We are in WEALTH ACCUMULATION mode for all market segments.
Remember, Xs mean OFFENSE or wealth accumulation, while Os mean DEFENSE, or wealth preservation.
Below is where our indicators stand as of August 21, 2020 (Courtesy Dorsey, Wright, and Associates).
On a general note: The Department of Commerce provided news on housing starts for July. Builders added homes as a seasonally adjusted annualized rate of 1.496 million homes, a gain of 22.6% over June 2020, and 23.4 % from July 2019. In each case, I am sure we can agree the numbers are good. The gains came from both single-family homes, and apartment construction. The number of permits issued also rose significantly.
The final bit of news (I can’t help if these things don’t get to my email inbox) came from the National Association of Realtors. They told us existing home sales in July rose by 24.7% compared to June. The seasonally adjusted annualized sales pace was 5.86 million units. That was the highest sales rate since 2006, and the highest monthly growth rate since the beginning of the trade group keeping records in 1968. The median sales price rose 8.5% to $304,100. That is a record sales price, even without adjusting for inflation.
If you want more information, email me at philip.rongo@ibexwealth.com.