Traders See No Reason Not to Buy
Bulls may not be creating a lot of upside momentum, but they're doing much better than the bears.
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Tuesday was a solid day for the market, with the S&P 500 moving up 1% and stopping just short of new all-time highs. The Nasdaq 100 QQQ led the charge with a gain of around 1.5%, while the Russell 2000 IWM lagged with a minor advance of about 0.1%.
The small-cap underperformance was reflected in breadth of just 4,950 advancers to 4,430 decliners. New 12-month highs were also quite sedate, with just 240 names on the list.
There was no specific news that triggered the upbeat action. It was most likely just a function of traders not having any good reason not to buy. There is still substantial optimism about the economy, and there is also some talk about a cease-fire deal in the Middle East.
The contentious presidential election is causing strong emotions among the political class, but ironically, it is a market positive when politicians are too busy fighting each other to meddle in business and economics. Also, terrible hurricanes tend to produce a short-term economic boost as billions are spent on recovery and repair.
Despite good action on Tuesday, the S&P 500 is back around the same level it was a week ago. None of the indexes have made much progress lately, but what is most notable is the strong support and constant dip-buying. The bulls may not be producing strong upside momentum, but they are doing much better than the bears, which can’t produce any sustained pressure.
I continue to do little buying, but I’m not selling what I own either. We have no major news on the agenda on Wednesday, and that may be positive for the bulls.
Have a good evening. I’ll see you Wednesday.
At the time of publication, Rev Shark had no positions in any securities mentioned.
