The Slow Upward Drift
Markets continue to trade in benign fashion with an upward bias and little traction on the downside. All of the major indexes except for the DJIA are at new highs for the year.
In economic news this morning, January new home sales rose to 468,000, which was better than expected. Not sure if this data was before the bad weather started. But the homebuilding stocks are rallying nicely on the news.
Asian markets were mixed overnight. Hong Kong's GDP rose 3.0% yr/yr. And the Bank of Japan said that the country's recovery remains on track even though Q2 GDP could come in below expectations due to the sales tax hike expected.
Commodities are mixed this morning. Crude oil prices are higher to $102.50, while gold is lower around $1328. Silver and copper prices are lower as well.
The 10-year yield continues to ease lower and currently trades about 2.69%.
The volatility index is up slightly on the day but still at a low level overall at 14.0.
Trading comment: Hard to argue with the strength in the market. All of the indexes are confirming the strength and despite the market reaching short-term overbought levels it hasn't sold off hard but instead just quietly consolidated in a sideways fashion. This is usually a bullish sign. We continue to feel comfortable adding to leading stocks that are breaking out or pulling back to obvious support levels. But we admit to shying away from some of the speculative stocks that seem overdone to us- stocks like TSLA or NFLX- which could be prone to large selloffs.