Add This Index to the 52-Week High List

by JC Parets  -  December 2, 2019

I hope everyone has a blessed Thanksgiving and as I said last week, we have plenty to be thankful for.

I am especially thankful for the permabears and everything they do to bring joy and profits to our lives. I can’t thank them enough for their constant stubbornness, obsession with negativity, lack of risk management and overall anger.

Today let’s take a look at yet another reason way the naysayers are wrong about U.S. stocks.

Just Add It to the List

Are you guys noticing how the new 52-week high list keeps getting longer, and not shorter?

I can’t emphasize enough how the lies about weak market breadth have been just that: Lies, or myths, or whatever words you need to use that won’t offend people. I stopped caring about that sort of thing a long time ago and just tell it like it is someone has to.

I’m just not seeing the weak breadth scenario playing out like they keep telling me it will. It’s actually been quite the opposite. We’ve been seeing expansion in participation for months. So this is really nothing new.

A Key Measure of Strength

The Value Line Index has been a helpful barometer of U.S. Stock Market strength in the past, and today is no different.

Here is the chart breaking out to new highs. Chalk this one up as yet another feather in the hat for the bulls:

This index uses an arithmetic mean to more closely mimic the change in the index if you held a portfolio of stocks in equal amounts. We look at it more as the ‘median’ change for stocks and it is often compared in my circles to the mid-cap indexes.

Regardless of how you use it or where it fits in your process, I think we can all agree that the Value Line Index breaking out to new 52-week highs, after all of the other stocks, sectors and indexes that we’ve pointing out that are doing the same, is another positive for stocks, not a negative.

Don’t Forget Technology

I still think that Technology is going to be one of the key drivers of the next leg up for U.S. stocks.

Right now that includes Facebook, which is setting up for an epic run. Not only do I see it heading toward all-time highs, but I see it going all the way up to $240.

We saw it test highs last week when it went up above $200. It’s dipped down just below that mark to start this week, but I still think it’s going up.