The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
And awaaaay we go.
Buyers got going around 2 AM, pushing S&P 500 futures into positive territory. Futures were +45 around 8 AM. The index opened up +45 and rallied further through the morning. The index topped out around 6020, +80 just before noon. Prices rolled over in the second half of the session but finished with a material gain. Capital flow was a bit heavier at 112% and Treasury yields continue to climb.
The bounce in stocks appears to be in-motion. Whether this is the January effect or not is a semantic debate at this point. Investors have been waiting for bulls to assert themselves in the wake of the dip and now they’ve printed back-to-back gains. The S&P broke above the 50 day moving average today (5948), and it did so convincingly.
This means that investors are confirming their biases in realtime. They are chasing the tape and they will continue to chase the tape, unless a big *negative* news story breaks. The calendar has a few big things in store:
These are significant events pending but there is no nervousness in anticipation of them. This means that they are highly unlikely to surprise and shock. The flip side to that coin is that *if* these events to surprise negatively, it’ll be a doozy.
It’s still early in the month so extrapolating is like rolling dice but right now the market is doing exactly what everyone expected. Everybody knew the plan and things are going according to it.
Is that a good thing or not in the stock market?
We’ll find out.
See you tomorrow.
-Mike
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