Tide Turning?
I am becoming more and more bullish by the day, and there are certain things that are making me feel more sanguine. First and foremost PRICE action is becoming a bit more firm, with indexes trying to CLOSE in the upper half of their daily ranges (best example may be the 3/26 session when jobless claims came in more than 3 million and the Nasdaq rose nearly 6%). Second, technology is beginning to outperform and its leadership is imperative is this incipient move higher. We are still well off the highs, but the Nasdaq is now 21% off most recent 52 week highs, compared to the S&P 500 and Dow which are 23 and 24% respectively off their own recent yearly peaks. Mondays which have been awful with four of the last five lower by 3.7, 7.3, 12.3 and .3% on 2/24, 3/9, 3/16 and 3/23, may have turned the corner with a firm session today. Sure the tech heavy benchmark still has many hurdles, and tomorrow may be another test as rebalancing takes place. Another 3% move higher, similar to today, puts it square at the very round 8000 figure, in the rough area of an upside gap fill from 3/11. Below we can see the momentum the XLK has behind it on a YTD basis, as it is less than .5% from overtaking utilities for the best major S&P sector actor. I put myself in the camp of selling former laggards that have ran too far short here, as opposed to adding new money to present winners here, which probably means we are going a lot higher.