Economic data was a lot less than to be desired, but that did not stop the market from moving higher. Small cap stocks lagged the overall market with the NASDAQ leading the charge with the S&P 500 ending higher by .29%. Volume was mixed on the session with volume coming in on the downside over on the NASDAQ, but higher on the NYSE. As we approach the three day weekend to observe Memorial Day do not expect much action out of the markets. We are not about to make more out of today than necessary. This uptrend has yet to produce super gains, but getting impatient will not do us any good. Today’s session was a continuation of our uptrend and nothing more.
It almost appears the market is sluggish and tired here. When you break into new high territory you want to see the market thrust higher. Let’s not forget we have been moving sideways since February. After a consolidation period a break in either direction typically ushers in a big move. Not this time. Maybe the market is simply waiting on the month of June. Given the lack of action to the upside it does increase the possibility this uptrend falls down. Of course we will need to see our holdings hit exit triggers and distribution days pile up. Until then, we will continue to manage our positons accordingly.
Sentiment certainly continues to paint an interesting position. AAII survey respondents continue to move towards the Neutral camp. 50% of AAII respondents believe the market will be flat over the next 6 months. 25% believe the market will be higher and the remaining 25% believe the market will be lower. NAAIM exposure index rose a bit week over week. Bearish bets still exist, but more managers have become a bit more bullish week over week. You would think even after the move to the upside AAII respondents would push higher.
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We hope everyone has a great long weekend. Happy Memorial Day weekend.
