The macro picture continues to be a headline grabber as another advisor to the US President steps down. Markets initially did not like the news as futures were down big Tuesday night. As it turns out the market simply did not care and small caps were the group to lead Wednesday’s market. Blue chip stocks in the Dow did not fare as well, but the index finished well off its lows of the session. Traders and investors are making it clear the NASDAQ and Russell 2000 are the indexes to be in at the moment. We have seen this market shake off a lot and it continues to shake off any negative headline. Odds are in favor of a rate hike on the 21st of March and this market continues to act like it wants to continue to push higher. Who are we to argue with the stock market?
Friday’s job report will certainly ruffle some of the market’s feathers, but it certainly what it used to be. As inflation becomes more of a focus wages will be highly scrutinized. Wages are the biggest component to inflation and any hint at accelerating earnings will certainly perk up a lot of ears. Whether or not it happens remains to be seen. How the market reacts to the news is anyone’s guess. We are not about guessing with the market and with our hard earned money. We’ll adjust and push forward. Allow the market to come to us and we’ll see what we get. Staying patient and waiting for signals is how we are successful. Not by guessing what the market will do next.
Recent market action has spooked the AAII bulls. In the most recent survey bulls dropped to 26.4% while bears inched back towards 30% ending at 28.4%. Neutral respondents dominate this week’s sentiment gauge. II bulls and bears continue to be lopsided towards the number of bulls. Bears remain non-existent on the survey. This week’s number doesn’t come as a surprise. The Dow and S&P 500 still remain below their respective 50 day moving averages. Perhaps tomorrow’s job report will juice up the large cap indexes sending them higher.
We hope you are having a great week!
