The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
Late squeeze.
S&P futures implied a +20 open this morning but they fell down in the 10 minutes prior to regular trading. The index opened +10 and looked like it might push up and make new all-time highs. It didn’t play out that way and the index bounced between flat and +10 until after lunch. The index dipped briefly in the afternoon but returned to flat towards the end of the session. In the final minutes we broke higher to print new all-time highs. Yields climbed 4-6 bips today and news was uninteresting and influenced little in the markets.
The S&P’s rally briefly stalled. 6128 was the all-time high and we have knocked on that door a few times since it printed on January 24th. With the rally last Thursday, it seemed likely that a modest further rally would take us over the goal line, but that didn’t happen. We came very close and gently failed. Today we just edged above it in the final moments of the session.
Currently the news cycle isn’t motivating investors. There’s nothing obvious on the horizon that will likely compel investors to get on, or off, the bandwagon with gusto. This suggests we’re limping along. Maybe we limp higher and print further all-time highs, which inspires a fresh spurt of upward momentum? Maybe we limp lower, which allows bulls to regroup?
It’s unclear how the market wants to resolve itself technically here. The probability of more new all-time highs is great. The attitude on the Street is one of an inevitable bullish outcome. Upside is just a matter of when, or so everyone says. It certainly feels like the best the bears can do is rent themselves a week before they have to go into hiding.
All of this is happening without fundamental influences. We are running on legacy sentiment and chart-watching.
I don’t know how powerful that can be. I wonder what kind of news will have material fundamental influence. It feels like we’re a bad headline away from a 5-plus percent pullback and there’s almost no good headline that could send us north 5 percent.
Maybe that’s just a perception, which has its own significance.
Or maybe it’s just boring out there and we’re craving action.
See you tomorrow.
-Mike
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