A slew of economic data hit the market, but failed to inspire buyers to continue to push the market higher. A better than expected durable goods orders number could not give the Dow and S&P 500 another day of gains this week. Volume dropped across the board as stocks digested Tuesday’s and Wednesday’s gains. This type of action is desirable as it allows for bigger gains down the road. Of course we want to avoid any major distribution. For now, today was a solid session and so far this week has been quite a good one! We will continue to hunt down for new signals as our uptrend continues to progress nicely.
Aside from solid price action it appears bulls are hibernating. For the week AAII Bulls came in at just 17.75% while bears finished at 29.39%. Those who are neutral sit at 52.86%. We are not about to try and figure out why or how we got here. Other than the folks who respond to the AAII survey are pretty much throwing their hands up and saying “we have no clue.” We simply follow trends and stay away from bull vs. bear, but we are in a unique environment to say the least. Stick with the trend and avoid the noise.
Tomorrow Janet Yellen delivers a speech on the economy at Harvard. It will be heavily scrutinized as many will want to know if the Fed Chairman has turned more hawkish since the last Fed meeting. The US Dollar will be closely watched as a more hawkish Fed will likely signal a stronger dollar. If the past few days have given any indication the market should continue its trend.
Stay disciplined and cut losses when necessary! Have a great long weekend as the country will celebrate Memorial Day on Monday the 30th. Stay safe and enjoy the day off!
