The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
Feelgood
Maybe the US/Iran agreement is actually around the corner? Overseas markets rallied nicely overnight and S&P 500 futures caught a sympathy bid. Oil fell along with yields. The index opened about +40 points and traded calmly around that level for the bulk of the day, slipping a bit in the final hour. Tech and Healthcare were the leading sectors while Communications was the laggard. Capital flow was light at 88%, as was the news.
We’re now very close to fresh all-time highs. 7517 is the high water mark. It is surprising that in a news-lite environment, we are storming back up to threaten an upside breakout. It is a sign of the sentimental strength in the equity market that we have essentially recovered the latest retracement in 3 sessions. The speed and the magnitude are not the surprising points. The surprise is that it happened on the heels of a 19% rally in the S&P in six weeks.
That rip is remarkable. That the market is ready, willing, and able to try to extend it…. In just a week… is astounding.
That six week rally took 32 market sessions. Going back to 1990, that’s a 99.7 percentile event.
One would think that the market would pause for a time after such a stretch. That doesn’t appear to be the case.
The mood of the market is strongly bullish. A brief dip seems to be all that was needed to re-energize the buyers.
Now we head into the 3-day weekend. Will the extra day off inspire further risk taking on Tuesday?
I think it will. It doesn’t make sense and it feels like an upside chase… but they say the trend is your friend. We have never seen such an obvious and persistent trend like this.
It’s way more lucrative to pile in and wonder when it’s going to stop than to fight it and wonder the same thing.
Have a great, long weekend. See you Tuesday.
-Mike
Visdom Market Commentary
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