Today the Dow Jones Industrial Average hit another record high as earnings continue to roll in. Volume ended the day mixed with INTC helping out the NASDAQ and NYSE turnover slowed. The S&P 500 is knocking on its all-time high too. Unfortunately, for Small Cap stocks they are not sharing in the fun as the Russell 2000 can’t simply fight its way out of a wet paper bag at the moment. It would be nice for the Russell 2000 to be the leader, but we cannot fight the trend and we must focus on what is leading us higher. There is no sign of this market letting up and until we have price signals suggesting otherwise we’ll stick with the trend.
While volume was lower on the NYSE the volume for the S&P 500 index was higher than yesterday’s trade. It will be important for the S&P 500 to push into new high territory with this big volume. Otherwise, without further price movement this will be viewed as churning a form of distribution. We aren’t overly concerned with it yet, but it is something we will keep an eye on as we push forward. The NASDAQ 100 had big volume, yet closed near the session lows. Today’s move in the NDX is stalling action, but one day doesn’t make a market. We have some big tech names coming out with earnings and it will be interesting to see how this index moves forward. We aren’t going to argue with highs, but we aren’t going to ignore signs of a market top.
We continue to see signs of strength in the homebuilder sector. There are some names within the sector looking to push higher. We have been chatting about a few in our chat room. Do not fall asleep on these stocks as they can provide your portfolio with some upside.
At one point during the early morning session the VIX sported a 10 handle. Investors continue to discount any possible volatility. Even our volatility measure sits at 6 month lows. The lack of volatility is sparking debate over complacency in the market. Sure, there is complacency in the market it is pretty obvious. It doesn’t mean the market has to move lower as we can remain in these conditions for much longer than anyone expects. Stick with price action and if volatility picks up we’ll adjust accordingly.
This market does not want to quit going higher and we’ll ride it as long as it moves higher.
