The day after Yellen’s speech and a great day for stocks we saw some follow-through on the upside. Volume was certainly lighter, but given yesterday’s move it comes as no surprise. ADP employment change was slightly better than expected. We continue to see gains from employment, but not at breakneck speeds. Crude reversed well off its highs after the weekly supply reports hit the market. Small caps did perform the worse on the session while the Dow and NASDAQ pushed higher. Utilities was the worse performing sector in the S&P. Not a terrible session, but not one that was overly exciting. It is certainly time to take a break and consolidate these gains. We still have an uptrend and we will continue to ride as long as we can.
The NASDAQ was able to clear its 200 day moving average during today’s session and was able to close above the key moving average for the first time since December 31st of 2015. It will be important to maintain this key moving average as we consolidate our gains. It would have been nice to close above today’s midpoint, but we simply did not have the buying power needed to do so. Volume continues to remain below average and continues to not be an issue. The only index remaining to clear its 200dma is the Russell 2000. It may be some time before this happens, but would be another good sign for this market.
This rally off the February lows has been quite impressive. We continue to see many doubt the viability of this market. This week’s sentiment reading will be interesting. Bears were at 23% on the AAII survey with Bulls just above 30%. After the past two days will we see the number of bulls finally hurdle 40%? Given the chatter on twitter it is unlikely. NAAIM survey should see an uptick, but will exposure get above 80%? As March comes to a close it has been one heck of a month. Those who were willing to ignore the noise and follow price have been rewarded. It pays to go with price.
We continue to have new longs and add to existing positions. This market is a little extended, but if we find new longs we are going to continue to act while maintaining our strict money management process. Come join us.
