Tuesday, October 27, 2020
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US stocks approach record high, all set for bigger gains

New York
The S&P 500 is nearing its all-time high, a level that could serve as a launch pad for bigger gains.
Technical analysts, who watch stock charts more than fundamentals, say there are some very good signs of strength in the latest move in the S&P 500, as investors diversify into lagging sectors.
The S&P has been up for the last seven sessions and was up Tuesday, trading about a half percent below its February 19 intraday high of 3,393.52 points. It was just short of its closing high is 3386.15 points.
The benchmark is more than 54 percent off its March 23 low of 2,191.86 points.
As the S&P heads back to its highs, the market is showing signs of being overbought and technicians say it’s very possible a pullback could come along with the new high before it then recharges for another move higher.
“Let’s not confuse pausing or consolidating at the high with the end of the rally,” said Chris Verrone, technical strategist at Strategas. “The market is on stronger footing today than at any time over the last several months. It’s not just tech driven.”
The fact that neglected sectors like industrials, materials and banks ares leading is a positive for the market and shows a broadening that is key for future gains.
Transportation shares were also much higher, with airline stocks up about 3 percent on Tuesday. The S&P industrial sector was up 1.8 percent and the financial sector was up 2.6 percent.
Five big stocks like Apple, Amazon, Microsoft, Facebook and Alphabet have been responsible for the bulk of S&P returns for the past year
Together, they are more than 20 percent of the total market cap of the S&P 500. They have also propelled Nasdaq, which has been hitting new highs since June. The Nasdaq was barely positive on Tuesday after trading lower to start the day.