The market exhibited a lot of spunk, but it was still tentative enough to give up a nice rally on Friday. Light volume suggests to me there are diamond hands among large investors. Newer retail investors are getting whipped around, especially as part of their psyche, if not actual portfolios, might be tethered to crypto, which really took it on the chin last week.
I do not mind selloffs on light volume.
But there was a defensive tone to the market, even as those non-profitable techs staged a strong bounce. On Friday, financials were the best performing sectors followed by utilities.
President Biden lowered his infrastructure ask, but cut in areas where there was bipartisan support, which means maybe the process moved further not closer to reality.
Keep an eye on energy, which edged higher even, as crude oil struggled at a key resistance point.
S&P 500 Index | -0.08% | |
Communication Services XLC | -0.34% | |
Consumer Discretionary XLY | -0.50% | |
Consumer Staples XLP | +0.01% | |
Energy XLE | +0.21% | |
Financials XLF | +0.99% | |
Health Care XLV | +0.02% | |
Industrials XLI | +0.49% | |
Materials XLB | +0.22% | |
Real Estate XLRE | -0.17% | |
Technology XLK | -0.55% | |
Utilities XLU | +0.52% |
Market Breadth
Market internals continued to improve but lack of volume = lack of conviction.
Market Breadth | NYSE | NASDAQ |
Advancing | 1,960 | 2,333 |
Declining | 1,353 | 1,859 |
52 Week High | 179 | 130 |
52 Week Low | 17 | 31 |
Up Volume | 2.28B | 1.57B |
Down Volume | 1.84B | 2.08B |
These comments are short this morning, as I put a lot of work into our State of the Union call on Saturday and Payne’s Perspective out this morning.
Recommended
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Today’s Session
The market will begin the session a little higher in part to China’s announced crackdown on commodities. At least that’s the headlines ,I think we could have seen a major inflection last week.
Earnings Season
There are no major earnings out today, but I think those names that were snubbed after great results could start to move higher.
Without a doubt, the market has totally ignored possibly the greatest earnings season - ever.
S&P 500 Earnings Releases (476) | Revenue | Earnings |
Beat | 78% | 87% |
Blended Return | 52% | 13.3% |
Key Breakout Points
The market has traded in a very narrow range, and most days have been relatively calm. But the wild sessions see deep swoons, and occasionally, buyers emerge. Still, for the most part, a lot of money is parked on the sidelines , not being seduced back into the fray.
On the flip side, I’m also impressed that money in the market isn’t fleeing, and that means smart folks with big gains are still not convinced the party is over. Note: a close above the red resistance line should be a solid green light to buy aggressively. Conversely, bounce-off support is fine for trades but not long-term buys – at least not yet.
Narrow Trading Range
S&P 500
NASDAQ Composite
Portfolio Approach
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