- Stock Indexes hit new 52 week highs
- M&A and P.E. funds behind the rise
- Bond prices (i-rates) remain key
As I write, the major stock indexes are breaking to new 52-week highs. This ends a two month consolidation and answers the “what direction from here” question. Moving to new highs will likely force the record short interest to cover. Once the shorts are out we can have more confidence in the next sell signal. Our proprietary trend indicator has turned back to neutral and will turn up next week if price and volume stay strong.
Merger and acquisition activity continues at a record pace. Additionally, the private equity funds continue taking companies private at a record pace. All of this means a decrease in the quantity of publicly traded shares. Economics 101, as quantity of supply drops, price will rise.
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Posted by Michael Chapman at 12:00 PM PDT
