The case for a new high in US stocks still exists but remains weak, according to Walter Zimmermann at United-ICAP. It relies on the latest move for the Dow, down from 17977 in November, being a fourth wave. As such, the up move since this time could breach this level soon. However, as with the S&P, any new high has a good chance of being a major bull trap – and a selling opportunity.
However, any new high is likely to be fueled by blue chips alone. It is much more difficult to make a case for new highs for the broader indices such as the NYSE and Russell, says Zimmermann.