In a "real" bull market (otherwise known as a secular bull), the tide usually raises all boats. A secular bull will allow all the major market indexes to reach new highs. Obviously, we do not believe this is a secular bull market.
A few weeks ago, the cover of Barron's was touting "Dow 12,000". While we cannot rule this out, we are not seeing the S&P and the NASDAQ anywhere near their previous highs. This being said, we still believe we are in a cyclical bull market that is very long in the tooth. We also believe there will be another attempt by the Dow to reach euphoric levels before the next stage of the bear market takes place.
For now, look for the S&P to hit support at 1300 on this pullback. Another attempt toward 1350 is our initial upside target with a possible euphoric top around 1375-1400.
The Dow was a stones throw away from our 11,750 target, and support is around 11,450, then 11,000.
The NASDAQ remains the laggard of the three indexes, and this is creating a concerning scenario not seen in most health bull markets. If the NASDAQ can break above 2400, this could clear the way for a march to 2500. There is a lot of work to be done here, so don't hold your breath.
