Answering the Call

What a way to answer the whispers. Even with the stock market heavyweight Boeing (BA) getting slammed out the gate, the market forged ahead.

Those whispers revolved around the notion that the turn in the calendar marked a turn in the fortunes of growth stocks in general and Technology (XLK) stocks in particular.

Not even close.

Technology rocked big time, but so did Consumer Discretionary (XLY), followed by Communication Services (XLC).

The Heat Map sizzled with only a handful of names in the red.

Market breadth is impressive, especially the up volume.

Market Breadth	NYSE	NASDAQ
Advancers	2,143	3,048
Decliners	704	1,280
New Highs	61	108
New Lows	25	95
Up Volume	2.43 billion	4.01 billion
Down Volume	1.27 billion	2.32 billion

The S&P 500 is sniffing out an all-time record.

The Russell 2000 fills a huge downside gap (see red circle), but it still has lots of resistance ahead.

Bond Yields & Rate Cuts

The ten-year yield is back to 4.0%. Ticks under this level will serve as fuel for equities.

There will be tons of rate cuts around the world this year, and many hope the Federal Reserve starts the party.

Portfolio Approach

Yesterday, we opened a Technology and closed a Consumer Discretionary position in the Hotline model portfolio.

Today’s Session

Even more evidence of the Super Strong Consumer...I can't wait for the credit card debt to hit $2.0 trillion. This spending is going somewhere, creating investment and trading opportunities - but this is not a sign of strength, more like a sign of depression. Consumer credit now above $5.0 trillion.

After yesterday’s reprieve, the market is feeling anxious this morning.  Make sure you have some cash, and let's see how this plays out. 

Big inflation data this week may provide greater cover. It could also prolong the guessing game on inflation, the type of landing and Federal Reserve actions.

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