Tech Stocks Lead Market Higher

Sector rotation continues to drive stock indexes up. Tech stocks shined today and let the market higher.

Stocks are climbing a wall of worry. 18 months of choppy, range-bound markets have conditioned many people to fade extremes in market breadth. The challenge of financial markets is that they never stay the same for a prolonged period of time. What worked well six months ago might not be the best approach today. I see many people trying to perfectly time a 2-3% pullback in stock indexes due to overbought conditions. In the meantime, a different sector is breaking out every day. Every trend needs skeptics. Otherwise, there won’t be anyone left to buy.
U.S. stock indexes are in a bull market. Bull markets are low correlation markets of stocks. They provide good opportunities on both, the long and the short side. The trouble with the short side in bull markets is opportunity cost. For each $1 you make shorting a weak name, you could probably make $3 being long a strong name.

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