New S&P 500 All-Time High Masks Underlying Frustration
The new high caused some celebration, but many traders are growing weary of the lack of buying opportunities.
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The S&P 500 and Nasdaq 100 QQQ managed to squeeze out another new all-time high, driven by strength in a few big-cap names. However, breadth was solidly negative, with small caps losing 1.4%. It was a mixed day, but the business media loves the story of a new all-time high, and that is covering up some underlying frustration.
Over 1,000 stocks hit new 12-month highs at some point on Thursday, largely due to rotation out of some of the larger-cap names and into small stocks that have lagged for a long time.
Momentum is slowing, and there have been several negative reactions to earnings, with Tesla TSLA being the most prominent example. Alphabet GOOGL posted a good report and gapped up at the open, but it faded all day and only managed a 1% gain at the close.
The next big earnings reports don’t hit until next week, and there were no new headlines about trade deals. Positive price action is the primary thing that is holding up the market as players continue to struggle to find attractive entry points.
There is an odd mix of emotions with all-time highs causing some celebration but a lot of traders are weary of this market, which continues to run away to the upside and offers very few pullbacks or buying opportunities. Many traders have given up trying to keep pace and are standing aside and waiting for some corrective action before they put capital to work.
The business media tends to send the message that a market that goes up every day is a great thing, but for many investors, it is an extremely frustrating market environment that offers few new opportunities.
Have a good evening. I’ll see you tomorrow.
At the time of publication, DePorre had no positions in any securities mentioned.
