The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
Let the good times roll.
News wasn’t jarring today and investors took that as a sign to continue feeling better about the future. Futures dipped in the premarket, in what appears to be a recent pattern, only to recover to flat by the open. Regular hours trading chopped around until catching a bid around lunch. The S&P rallied to +44, gave it almost all back, and then re-rallied to similar levels towards the close. Capital flow remains quite low. Today’s value was 84% of the 90-day average. Yields fell across the curve and the Dollar strengthened a bit too.
We seem to be in a stretch of continuation. Headlines weren’t drivers of investor action and while capital flow was low, the active capital pushed stocks higher. The longs had themselves a heck of a week and the gains from Monday’s lows are eye-popping, 8+%. No doubt, a lot of dip-buyers are kicking themselves for not acting on Monday and they are reluctantly throwing in the towel and hitting their buy buttons today. Better late than never but also, the chart is more encouraging today, than earlier this week.
With no fundamental shift in the landscape, investors look at the chart. And for anyone hungry to buy, this week looks like a sign that the bounce is intact.
I’m not enamored with the look of the chart but it does look good for the longs, provided you think that we’re *not* heading into a recession. That’s the big economic risk for the next quarter. Will we or won’t we fall into a recession? Polymarket says the following:
Today’s odds are slightly better than Liberation Day but it doesn’t make me feel too good about coming out of the present mess without any scars.
Buyers of stocks this week think that these probabilities are too high *or* that chance will favor them and we’ll make it through without growth contraction this year.
I think that’s a pretty rose-colored view but the market is extending the latest *sentiment* bounce and good feelings are easy to build upon with a quiet news environment (albeit 1 day) after all the drama we’ve just seen.
I expect investor vibes to improve over the weekend as long as the news headlines cooperate. The bulls are on a roll and investors want to keep it going if the world will allow them.
See you Monday, have a great weekend.
-Mike
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