I’m digging the action, but not head over heels just yet. There is still a ton of non-believers; hence, most sideline money remains parked on the periphery watching the parade from afar.
Intriguing action sees more rotation. Energy is a big loser, but so, too, are Financials, Materials, and Industrials. And forget about those reopening darlings from airlines to cruise liners.
To me, the clear winner are the computer chips, which are still significantly oversold. I’m not buying this notion the massive supply shortage will morph into a powerful glut overnight.
The SMH semiconductor index held right when it had to, and it now looks to be heading back to test the recent high.
I continue to marvel at how money moves so quickly from one niche idea to the next and then back again. Lots of so-called value stocks are very expensive and lots of growth names are inexpensive based on things like PEG ratios.
Its great money is staying in the market, but the next big leg higher comes from greater application of cash hitting those funds each day. I suspect it will take a little longer to ease inflation worries, but if the broad market edges up in unison, we could see panic buying happen before that.
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