Can Stocks Make It Six Weeks In A Row?
The market finished another strong week last week by rising another 3.6%. That marks the fifth straight weekly advance for the broader market, a fairly rare feat. Although I can find a few instances of longer streaks on my tracking spreadsheet, it is still not that common, so if I had to guess I would expect a flat to down week ahead.
Today, there is no news flow to speak of, and that will likely leave the focus on the dollar. As I have said lately, the market regularly trades inversely to the dollar these days, so on a day like today when the dollar is up, we can expect stocks to be weak.
The euro is also very weak this morning, and commodities are down a bit as well. Oil is lower to $86.25 while gold is down near $1388.
Among the sector ETFs, technology (-0.04%) is holding up the best. Most of the tech stocks on my screen are actually in positive territory, as is the NDX right now. Consumer discretionary (-0.77%) and financials (-0.71%) are down the most so far.
Asian markets were mostly higher overnight, while Europe is slightly lower today; the 10-year yield is lower to 2.51%; and the VIX is up +4.3% today to 19.06 after hitting 6-month lows last week.
Trading comment: The bears are probably reloading this morning, hoping for that elusive pullback. It has been a frustrating market for them, but my sense is that underinvested portfolio managers are still looking to put money to work on any dips, and that is why said pullbacks have been so fleeting.
Unless some news comes out to shake their confidence, I see that trend continuing. Credit default swap prices on European sovereign debt have been rising lately, so that is one yellow flag to watch. But with a strong earnings season behind us, new quantitative easing, and economic data seemingly improving (last week's jobs report and ECRI index), it seems like we are going to just see more of the same into year end.