Disappointing economic news couldn’t keep buyers away from pushing this market higher today. Volume was lower across the board, but above average showing there was some interest in accumulating shares today. Perhaps it was fresh beginning of the month capital flooding the market, but it was a decent bounce on the day. The S&P 500 even closed at a new all-time high today! We saw the NASDAQ and Russell 2000 play a bit of catch up with the Dow and S&P 500 the past few sessions. It is possible we are in a new uptrend with the Dow and S&P 500 breaking out first. As price moves we adapt and it is close to turning positive for the overall market.
What is clear and you can see on IWM and QQQ is how important the March lows set last week. SPY and DIA are a different at this point in time and are in the lead. This market is long in the tooth and without a meaningful 10% or more correction there aren’t a lot of stocks in buyable patterns. Sure, continuation patterns are there, but there are quite a bit of damage in many names and only time will solve. Keep an eye on what has held up and what is leading the charge and follow their price movements.
April is a decent month for the S&P 500. SPY has been around since 1993 so there are not enough instances to make a reasonable assessment. However, since 1993 SPY closes positive 71% with more than 2% in gains. However, take into account 64 occurrences in its history 44 have been positive with an overall average gain of 1.5%. The 20 occurrences where the index closed in the red the average loss was 2.5%. We are off to a good start with the S&P 500 closing with gains of 70 basis points.
Stay with the program and continue to execute!
