Another day of autopilot gains for the market. Tuesdays have been extremely favorable in 2013; the DJIA is up something like 17 Tuesdays in a row; a strange situation. The market is also up 11 of the past 13 sessions. In the absence of any major economic news stocks simply melt up. The S&P 500 gained 0.52% and the NASDAQ 0.11% as technology stocks took a break from their recent big gains. Every day money rotates into something new so the indexes are generally holding up even as one group or another takes a day off.
Back to autopilot mode..... After some excitement and a potential breakdown in the middle part of April, stocks have resumed their march upward with most indexes notching 10 gains in the past 12 sessions. In this environment the main concern is not piling in when stocks are short term overbought and of course buying every dip. Under the surface a move to more cyclical sectors continues as today was a rare day in 2013 that healthcare, utilities, and consumer staples all sold off yet the market rallied. The S&P 500 gained 0.19% and the NASDAQ 0.42%. News flow was slow; there was some Chinese service data released that showed significant slowing but the market is ignoring it.
?We're in a bona fide bull market folks. After a tremendous bear trap two weeks ago where a nearly half year trend line was broken, the market has made another of its now infamous "V shaped" bounces, capped off my today's employment data. The report was not tremendous but expectations had been weakening during the week as a series of poor economic reports caused people to think this would be a miss. Not only was it a "beat" but previous months were revised upward as well. The ISM Non Manufacturing report, released later in the day, was not as rosy, but was lost in the bullish halo surrounding employment. The S&P 500 gained 1.05% and the NASDAQ 1.14%. For the week the S&P 500 gained just over 2% and the NASDAQ just over 3%.
A solid recovery Thursday by the bulls as an interest rate cut by the European Central Bank and a general buy the dip mentality conspired to bring buyers in. Weekly jobless claims also fell to a 5 year low ahead of tomorrow's two key reports: ISM Non Manufacturing and the monthly employment report. The S&P 500 bounced back smartly from yesterday's losses to hit another all time high as it closed at the very top end of its multi week range, with a gain of 0.95%; the NASDAQ added 1.31% as tech stocks continue to see recent flows.
Markets came into today's session overbought near term but bulls would have preferred more of a sideways/mild down sort of day. Instead there was a relatively serious selloff. It was not seen as much in the major indexes which were down 0.93% for the S&P 500 and 0.89% for the NASDAQ, but that small cap Russell 2000 was crushed to the tune of 2.45%. Further a lot of sectors had what is called a bearish engulfing candle which is simply when one day's range totally engulfs a series of other days and closes at or near lows. The market remains tricky even as it grinds ever upward. Today's culprit was some poor data from China overnight which started the negative tone, followed by some disappointing U.S. data which finally mattered to the market for more than 60 minutes.