The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
Fizzling?
Continuation was the story early today. Overseas markets rallied. S&P futures went from unch’d to +12 in premarket trading. The S&P 500 opened about +18 and went to +35 in the first half-hour. There weren’t significant headlines but yields were a few bips lower across the curve, which helped. The bull ran early but didn’t have endurance. The tape rolled back almost to flat by lunch. We got there in the early afternoon and rallied small later. Capital flow tracked at 118% in the morning and eased up over the session, finishing 112% on the day.
The elevated capital flow, combined with another push higher suggests a fresh surge to get long stocks. This bodes well for the bulls. The nit to pick regarding today was the surge in the morning that was rejected and the counterpunch was a weak push in the afternoon.
The bulls are setting new all-time highs so we can’t call today a defeat for them. We just didn’t see the jail-break to the upside that technicians would love as a confirming signal. Breaking above old highs, followed by a further big rally, is truly a sign of strength. We saw a small rally after breaking above old highs. That’s a bullish signal, but not a quintessential one.
It’ll have to do. And to be fair, not many bulls are complaining.
Anywho, the bull runs (slowly) and the best the bears can say is that they are getting tired.
This bodes poorly for anyone shooting against the tape. Even if we get a significant dip, it will be bought with a *vengeance.*
The investing landscape has to *shift* for legacy behaviors to change.
Until some major event tilts the scales and turns the tables, the trend will persist.
See you tomorrow.
-Mike
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