Complete Monday Game Plan 12/2/13

Markets were bifurcated on the shortened Friday session with the Nasdaq leading the way up .4% and the S&P 500 lower by the slightest of margins. Kind of mimicked the action for the week as the Nasdaq gained 1.7% and the S&P 500 was higher, but barely so. The minute advance however did give the S&P 500 its largest winning streak of 2013 with its 8th consecutive weekly gain. It also has managed to close above the round 1800 number everyday since crossing that mark last Friday. Going into the final week of the year, the Nasdaq will clearly outdo the S&P 500 on a YTD basis unless something dramatic happens as it is up 34.5% thus far compared to the S&P 500’s 26.6% move. Looking back to years past as the Nasdaq gains near 30% on an annual basis, the following year is usually a good one as well. In fact since 1985 that has happened 6 times, and all 6 times the next year was higher for the tech benchmark. Yearly moves of greater than 30% occurred in ’85, ’91, ’95, ’98, ’03, ’09. The two best performances were ’96 22% yearly move following ’95’s 40% gain, and 1999’s 85.6% move following ’98’s 39.6% gain. That bodes well for 2014. Returning to the present Fridays breadth for the Nasdaq was impressive as 336 names made new 52 week highs compared with 6 new lows. Financials and medical names continue to dominate that list. Remember as in life, and the markets, things in motion tend to stay in motion. For those still calling for big corrections, their day in the sun may be coming, but they should have a large supply of sun block, as that day could be further down the road as many think. Sure markets may be stretched here, but the buying frenzy associated with bubbles just does not currently exist. Perhaps when we see the S&P 500 2000 hats making headlines we can start to anticipate some fragility.