Hello TheoTrader,
Last week was a reminder to never count your chickens before they hatch. Up until around Thursday, it looked like bears had seized the initiative in the tape.
But back-to-back strong days for the bulls completely flipped the script by Friday’s close.
The strength of the rebound was further confirmed from the leadership at the sector level. Technology and semiconductors did exceptionally well (thanks, Micron), but that wasn’t even the biggest story.
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Everything is On-Sale
Over the weekend, I wrote about how markets were discounting a much stronger consumer than expected. I didn’t just make this up for the sake of being a contrarian, or to stick it to the permabears.
You see, I happen to believe that the market knows the truth about the state of things above all else. So when the market is bidding up consumer discretionary and retail names left and right, it’s hard for me to think that we’re on the verge of a bear market.
Now, if we were seeing a sector like consumer staples outperforming, I’d be singing a very different tune.
The Santa Claus rally period starts on Wednesday, so now there are seasonal tailwinds coming into play. If stocks are going to make a run at new all-time highs, this is the time to do it. I’ll be looking for tech to reassert some leadership this week underneath the surface of it all.
Keep you posted,
-Gianni