Momentum Monday – The Rise of Everything

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The S&P 500 is consolidating in a tight range near its all-time highs. The Nasdaq 100 is not too far behind. The small-cap index, Russell 2000 is back above its 50-day moving average. In other words, the market is hitting on all cylinders. For the most part, everything is rising. This is a notable change of pace compared to the last two months which were characterized by frequent sector rotations – when basic material and financial stocks went up, tech suffered, and vice versa. The one thing that has remained the same is the short-term nature of most moves. We continue to see a lot of intraday fading. It seems institutions are still not interested in chasing breakouts but they eagerly scoop up pullbacks. 

The most shorted stocks were the big gainers of in the past week or so. The so-called meme stocks that went crazy in late January, had a second round. Some of them even exceeded their January levels. AMC, for example, went from $10 to $35 in two weeks. All other meme runners were also on fire – GME, DDD, SPCE, FUBO, etc. 

The U.S. Dollar’s weakness is reincarnating interest in emerging market stocks. Brazil and other Latin American ETFs had major breakouts last week. Quite a few Chinese tech, biotech, and financial stocks are perking up and setting up. There’s notable strength in other areas of the market as well – industrial metals, gold, silver, oil, semis, medical devices, cannabis, even some software stocks are trying to push higher.

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