For the most part, economic data has not been stellar. Those who are bearish on this economy continue to point out how we are overvalued on every metric. Unfortunately for those who continue to fight this market have been bitten pretty hard. We had a decent rebound after the past two days of selling. For much of the trading session each and every low found support. All of this build up leads to tomorrow’s release of the all-important monthly Non-Farm Payroll numbers. In the end, all that matters is we are in an uptrend and our holdings continue to act well.
Sentiment continues to have a bullish tint, but the AAII survey continues to show a good amount of neutral. AAII bulls dropped nearly 6 points to 39.8% as Bears jumped 3 points to 23.4%. NAAIM investment managers remained bullish, but long exposure dropped to 92%. II bulls remain in control with 58.7% of respondents are bullish. Bears still remain in the teens. It certainly feels like we are going to continue to see sentiment readings like these for many more months. Last October was when we saw any real change in sentiment. December was a small blip when compared to October of 2014. Lacking any extreme readings sentiment continues to provide little insight at this time.
Solar stocks continue act well with CSIQ gaining nearly 15% on the session. Crude oil prices may have been cut in half since July 2014 electricity rates continue to set records. We did have a politician tell us under his energy plan electricity rates would not necessarily rise. Oops. What we do have is momentum in solar names. FSLR and SPWR have come off their lows quite nicely. The group has momentum and to keep with current analysis make your way to our chat room.
Also in our chat room we continue to see opportunities intraday. Biotech and earnings winners continue to provide us with some opportunities to boost our returns. The most important key is to cut losses. It is dangerous when you leave yourself exposed to the downside. Following a discipline is the best course of action.
This market remains in an uptrend and while the S&P 500 does have four distribution days it is the NASDAQ Composite leading this market. If we begin to see material weakness in the NASDAQ we will have to adjust course. In the meantime, it is steady as she goes.
Enjoy the monthly payroll figures! Have a great weekend.
