The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
Upside
S&P 500 futures traded up about 40 points in the premarket but it really took off once the market opened. Crude oil dropped along the curve on the usual US/Iran headlines. Treasury yields came in across the curve significantly. Both those market moves helped stock bulls. The Mag 7 performed very well and led the market higher. Of the Mag 7 only AAPL fell. Communication services was the leading sector while energy was the worst performer.
Headlines today didn’t have any zingers but perhaps that what the stock market wanted. Investors appear to be chasing momentum, chasing the tape higher intraday and pushing into the old leaders of the last strong bullish trend. The technical results are looking clear at this point, the bounce from last week is confirmed and the only thing left to do, is to break through the all time high of 7621.
We are not far away from that level. Dip-buyers made their moves last week and now the rest of the market is going to work. Certainly the momentum players are back at this point too. After the past two months of choppy trading, it looks like we could be at the beginning of a run to the upside. It would not surprise me to see and consecutive sequence of only positive prints. That’s been the M.O. of the market after a bounce and with both price and sentiment bouncing, the follow-through seems likely.
A bad headline or a bad datapoint could always upset the apple cart but a bit of good news or data could also turbocharge this new trend.
The next big item on the horizon is July nonfarm payrolls (+80k vs +57k prior) on Friday morning. ADP comes Wednesday but unless that’s an outlier, I think NFP is the catalyst of note.
See you tomorrow.
-Mike
Visdom Market Commentary
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