It should be easy to be bullish. All you have to know is three words – All-Time Highs. That’s what the Russell 2000 hit this week. If you see a technical analyst draw any other conclusion when a broad based index is hitting all time highs you have to question his understanding of charts. All-time highs imply that the main rule of a rising market is being met – higher highs and higher lows. While the market is a bit overbought, the market has already begun to pull back and test the breakout. If that holds, the market should be in good shape.
And while the S&P 500 is still hanging out below its beginning year highs, the Equal Weighted Index has hit a new multi year high as well. While the S&P 500 is weighted to the large cap companies, the Equal Weight Index gives a better measure of the average stock.
