The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
Breather.
S&P futures traded down about 7 points overnight and in the early morning but they began to rally as we approached the open, a familiar pattern. The S&P opened up a handful of points and rallied further, printing new all-time highs before 10 AM. The party ended as quickly as it began and the index rolled over to unch’d throughout the morning. After lunch the index fell down significantly and it spent the afternoon trading down about 25 points. Flow was low, 94%. Yields came in small. Utilities led among the sectors and info tech lagged.
Today was as quiet as prior sessions this week but the index fell instead of climbed. Does that mean anything? At this point, I think not. The index is up 100 points for the week and 200+ for the month/year. The bullish trend is intact and today’s drop, while not explained by any news item, doesn’t jeopardize the perception of a bull-market-in-motion.
We’re heading into the weekend with great anticipation. Next week is going to be a doozy. Five of the Mag 7 report, the FOMC releases their next rate decision on Wednesday (no change expected), and it’s the last week of the month.
If Meta, Microsoft, Tesla, Apple, and Amazon guide positively, we’re going to pop the top off this market. If the Fed says anything that isn’t a hawkish surprise, markets will react with relief. If the animal spirits rise next week, expect a lot of sidelined capital to chase into the market before month-end.
Those are significant ifs. A breakout to the upside is not certain. But it seems like it’s a safer bet than not. I suspect today’s drop will be re-perceived as a good ol’ dip come Monday.
And that dip will be bought.
See you Monday, have a great weekend.
-Mike
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