S&P 500 Near New Highs

The stock market is higher again this morning, defying those who continue to call for a pullback. I have been talking about how even though the market had become overbought, instead of pulling back it mostly went sideways while the overbought condition got worked off. This was a positive sign, and as you can see in the chart below, the oscillator has confirmed the recent highs in the market by making a higher high.

Speaking of new highs in the market, the Nasdaq, small- and mid-cap indexes have all made new highs for the year. Only the S&P 500 has yet to confirm this breakout. But at 1148 right now, it is not far from breaking out into new high territory soon.

The Nasdaq is again leading the SPX today. The strongest index is the biotech index, with acquisitions taking place in the sector, the BTK is up +5.4% today. Financials are also strong, with a successful preferred offering by Citi, couple with short-covering and positive comments from analyst Dick Bove, pushing the BKX up +3.2%. The energy index (XOI) is lagging, -0.14% so far.

Among emerging market ETFs, Brazil (EWZ) is up most, +1.55%, while Russia (RSX) is lagging, -0.41%.

The dollar is lower today, helping to support commodities. Oil is trading higher near $82, while gold is flatting around $1122.

Asian markets were mostly flat overnight. China fell -0.7% after Chinese banks reported extending about 700 billion yuan in new loans for February, half the amount loaned in January as tighter lending restrictions took hold.

The 10-year yield is rising to 3.74%, and the VIX is down -2.2% to 17.52, very close to new lows.

Trading comments: Not much to add to what I stated above, and what I have been saying the last several days. The indexes are making new highs, and growth stocks are breaking out and showing strong technical action. I am staying the course, and looking for dips to add back to names in which I have taken partial profits.

long EWZ, XBI