The market welcomed traders back with a solid move into new high territory. Volume was up across the board as traders raced to get in the action. Retail simply has not been participating as seen in the AAII survey and at this point they have missed out on a great opportunity. Small cap stocks led the market moving nearly 1% on the session. While we did not close on the highs of the session overall it was a solid session for the market. As long as we avoid any stalling and distribution there is no reason we cannot keep going higher. There is no magic potion. Get with a trend and stick to it as it will pay off. This uptrend has certainly paid off.
Yes, this market is overbought. It would be really easy for us to pontificate about a market top. However, we know better. This market can run in overbought territory for much longer than anyone expects. Shorting is a very dangerous endeavor at this point and like we saw in February where the market rip your face off rally. Keep it simple. Do not overthink this market. No matter what you think the market may do it will likely do the opposite.
Economic data this morning was somewhat mixed. Empire manufacturing missed the mark showing a decline while economists expected a gain. Homebuilder sentiment was as expected, but higher month-over-month. XHB rose nearly 70bps on the day, but couldn’t match the move in semiconductor stocks. The SOX jumped 1.36% today as semis continue to push higher. Great to see semi-conductor stocks pushing higher and leading the market. Even INTC looks bullish.
A solid start to the week. This week is peak vacation week for the US and it will be interesting to see how this market progresses. Have a great week and trade well!
