A week ago Monday the market had a horrific selloff (cough)... I believe it was over 1% (cover the children's eyes). Since that fateful day in our history, the market has finished positive each and every day. We are now in week 7 of this rally of about a 20% gain. Usually our rallies during this move off the March 6th low have been 6-7 weeks before some rest or pullback (however minor). Hence why I thought we'd begin to correct (to some degree) either last week or this. And yes, I meant correct for more than half a session. We are about to post the 6th straight positive month, something that I cannot remember happening in all my years - not even in NASDAQ 1999 (I will have to go double check). [p.s. if anyone has a source of MONTHLY returns of the S&P 500 over history please email me, I wanted to see how many occurrences of 6 months straight of gains have ever happened]
Each week brings us new and exciting things we rarely if ever see. This week has been remarkable in its own small way... aside from the fact this entire month 1/3rd of the NYSE volume is in 5 government supported financial companies, we have had a material intraday selloff in 4 sessions (every day but Wednesday) Yet no ability to follow through.
Short exposure is at its lowest in a long time, institutional investors are as in as they have been since the market peak in October 2007. Yet we don't sell off. Contrarian signals are apparently no longer of use.
It feels like a market running on vapors - but it continues. I am watching about 100-150 stocks and 95% of them only seem to be running in place the past 3 weeks. They go up, they go down, they end up nowhere. But the indexes keep churning up. Technology has lost its leadership status - which was a large part of this rally. China has lost its leadership status. Material & Energy (reflation) has lost its leadership status. (although if you want the computers to run them up, just hammer the dollar whenever the market is about to turn down)
Your leaders are now AIG, Fannie, Freddie, Citi, and Bank of America. The blind leading the blind...