As the market continues to grind higher, investing gets more challenging, and MoneyShow’s Tom Aspray takes to the charts to figure out what investors’ next move ought to be.
Early release of the FOMC minutes and the Fed’s resolve to keep rates low apparently is just what the underinvested bulls and nervous shorts needed to trigger strong buying. The S&P 500 made new all-time highs and had its best day since late February, gaining 1.22%.
All of the major sectors were higher, led by technology as the Select SPDR Technology (XLK) was up 1.76% followed by the 1.68% gain in the Select SPDR Health Care (XLV). The financial and industrial sectors also outpaced the S&P 500.
The market internals were strong with advancing stocks leading decliners by almost a 3-1 margin. The NYSE Advance/Decline line has made new rally highs confirming the new price highs. Only 311 stocks made new highs on the NYSE, which is well below the prior four peaks.
With no overhead resistance now for either the Dow Industrials or S&P 500, one might expect that the bullish sentiment was extremely high. Therefore, the latest AAII readings of individual investors, released today, will surprise many investors. As of April 11, only 19.3% are bullish with 54.5% bearish. As of last week, the financial newsletter writers are still quite bullish.
So what is an investor to do now? Add to long positions, sell your stocks, or take no new action?
The iShares Russell 2000 Index (IWM) was up 1.81% Wednesday as it has reached the underside of the former uptrend, line e.
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