Although the move ran out of gas early in the session on Wednesday, it was a broad rally with continued momentum in Technology and a bounce in Energy after a massive drawdown of U.S. crude oil. However, the Communication Services sector found traction as the rotation into momentum names continues.
Market breadth continued to improve with the declining volume on the NYSE and the NASDAQ (declining dramatically). I like the cautious tone of the market, as the unloved factor of this rally continues to suggest a lot more to the upside.
Symbol | Select Sector SPDR Fund | Last | Change | % Change | Volume |
|---|---|---|---|---|---|
XLC | Communication Services | 50.84 | +0.57 | +1.13 | 2.29 M |
XLY | Consumer Discretionary | 122.42 | +0.44 | +0.36 | 2.38 M |
XLP | Consumer Staples | 59.51 | +0.38 | +0.64 | 16.8 M |
XLE | Energy | 64.04 | +0.81 | +1.28 | 11.77 M |
XLF | Financials | 27.97 | -0.10 | -0.36 | 36.56 M |
XLV | Health Care | 93.46 | +0.32 | +0.34 | 5.35 M |
XLI | Industrials | 76.52 | -0.18 | -0.23 | 10.12 M |
XLB | Materials | 57.55 | -0.12 | -0.21 | 7.31 M |
XLRE | Real Estate | 38.26 | +0.21 | +0.55 | 8.59 M |
XLK | Technology | 80.25 | +0.63 | +0.79 | 10.11 M |
XLU | Utilities | 60.99 | +0.14 | +0.23 | 11.49 M |
NASDAQ Breakout
When momentum names get hot, the NASDAQ leads the charge and that’s been the case this week. Of course, this poses a dilemma for investors that have missed the rally. You are going to hear a lot of mavens’ question buying at the top, but today’s top can be tomorrow’s bottom and the foundation for the next major leg higher.
The last two times the NASDAQ was breaking through a triple top, and where the mavens would have warned investors not to buy, were the following dates:
- January 2012 at 2,905
- July 2016 at 5,162
Sure, you would be buying the top here, but there’s a good chance a couple of years from now, you could look back and smile at buying a low entry point.
Line of the Day:
“we see the economy in a good place, and we’re committed to using our tools to keep it there.”
-Jerome ‘Jay’ Powell
The Fed is our friend, even if Powell had to use the word “origami” to say his watch will be different because there will be no recessions.
Portfolio Approach
We added two Technology ideas yesterday. We lowered our cash to 5%. Click here to get started on our Hotline service today.
Communication Services | Consumer Discretionary | Consumer Staples |
1 | 4 | 1 |
Energy | Financials | Healthcare |
1 | 2 | 1 |
Industrial | Materials | Real Estate |
2 | 3 | 1 |
Technology | Utilities | Cash |
3 | 0 | 1 |
Join the conversation as a VIP Member