Momentum Monday – The Same Trends Persist

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The same trends persist – the majority of stocks continue to edge higher; Interest rates too as inflation expectations are rising. The U.S. Dollar is still under pressure. Cryptocurrencies keep getting more popular. The only things that change often are the leading sectors. While some of the high-flyers (cannabis, 3D printing) pulled back last week, money rotated into semiconductors and software stocks. 

There are more SPACs, IPOs, secondary offerings. The supply is growing but the bull market is still intact. In fact, we saw a significant spike in speculative moves last week compared to the previous. It’s anyone’s guess how long it is going to last but when you have so many sectors making new highs and setting up for potential breakouts, it is better to stick on the long side. Granted, there have been the occasional hiccups lately – the number of false breakouts and intraday shakeouts have increased but this is a normal part of any bull market – bull markets correct through sector rotation.  

Quite a few sectors are setting up for potential breakouts: metals (XME), financials, (XLF), industrials (XLI), even the so called recovery industries like airlines and casinos are looking constructively.

Clean energy is still strong. It seems a different EV stock is popping up 20-30% every day of the week. It is certainly a sector with a lot of hot money and movement: TSLA, NIO, LI, GOEV, AYRO, FSR, etc. Solar also stocks continue to set up.

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