S&P futures are hovering around the flat line Wednesday morning after the index made a new all-time high yesterday,resuming the quiet melt-up type action that traders have grown accustomed to in 2013. This feels like one the most hated and ignored moves to all-time highs in history due to low participation. Maybe that's why it could keep going. We've talked the road to S&P 1700 for a few years now. It's taken a well-disciplined plan and approach to navigate it, and even with that it's been tricky to maneuver.
Weak economic data has done little to dampen bullish sentiment in this market, as it feels world central banks are driving the rally. The market has been quiet the last several sessions, perhaps waiting to hear the latest testimony from the US Fed and ECB. The rate decision, on top of ADP report at 8:15am and ISM at 10am, could stoke some volatility today. There won't be a Big Ben Press conference today, but we will be listening for pace of purchase indications and the characterization of inflation trends. Thursday we will have statements from the ECB, which increasing is expected to make a rate cut or introduce new stimulus measures.
Friday we have the jobs report, and it will be interesting to see whether the market reacts to it at all. Last jobs report, horrendous numbers were released that triggered a gap down, but the market swiftly erased those losses. Companies seem to be boosting buy backs, paying dividends, but not hiring. It seems to be the new normal in today's business climate with uncertainty still present in the economy. Maybe this is why most don't like this recovery unless you are invested in the right stocks and employed.
The technical picture hasn't been perfect but the rotation has kept this market moving. The Rally off the 50-day a few weeks back had commitment to it. When the markets took back S&P 1565ish, it showed that the bears still didn't have much power. That was the time to go from cautious back into somewhat of a small portfolio approach mode.
This is not an all or nothing environment, it's a pick your spots environment. Navigate through sectors and use a tier system. Both longs and short have been working but the real money has been looking for quality stocks with the right entry points..
Today is the first day of May and it seems like most people have been saying Sell in May and Go away since January. Well now we are here, let's let the market tell us what to do.
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*DISCLOSURES: Scott Redler is long GS, BAC, C, INTC, AA, MGM calls. Short SPY.