Gladly it was a really Good Thursday as stocks finally closed above 4,000 for the first time. This sparks the natural next question of...Is this a breakout or fake out?, asks Steve Reitmeister, editor of Reitmeister Total Return.

I could make an argument in either direction. In general, stocks typically rush up to a point of major resistance (like 4,000) and then we spend weeks or months consolidating below that market building the energy to finally break higher. In this case, we never actually made it all the way to 4,000.

However, an argument could be made that the last several weeks since mid-February have been akin to the consolidation period noted above. And thus, we already have stored up the necessary energy for a lasting breakout above 4,000 starting now.

Going back a few weeks ago I talked about this consolidation lasting until earnings season in April. Those reports don’t really get rolling for 2-3 weeks. But given rising evidence of another strong earnings season in the offing, then some investors may want to jump the gun and start buying now.

The catalyst for this move may indeed the sparkling evidence of economic strength this morning from ISM Manufacturing exploding higher to 64.7. New Orders was even more impressive at 68.0. Plus, we got the strongest Employment reading in a long, long time at 59.6.

If indeed manufacturing is the leading indicator of the overall economy, then this is a sign of more widespread economic strength across other industries that should certainly show up in Q1 earnings reports and guidance for Q2.

This kind of fits in with one of my dad’s favorite expressions: Six of One...A Half Dozen of the Other.

Meaning the label doesn’t matter that much as the outcome is likely the same. So, whether we break out now, or soon in the future after a little more consolidation, then it’s about all the same as you review things at the end of the year.

As such, I am prepared to put our 11% back to work in the near future. Gladly that tiny stash of cash hasn’t stopped us from enjoying ample gains this week with the surge above 4,000.

Leading the RTR portfolio today was:

+1.53% THO

+1.62% MIME

+2.23% NSP

+2.71% AVGO

+2.74% ATVI

+4.66% KLIC

Note that our three tech picks (AVGO, KLIC & MIME) and ATVI, which were the most maligned in the recent market activity, were leading the parade today. And this is exactly why we don’t sell good stocks in the face of a sector rotation. There we find that what goes down the most will bounce the most in due time. And certainly, that time seems to have arrived.

The early action next week will tell us if indeed the breakout is for real or we will have more consolidation period ahead. But six of one or half dozen of another, we will be above 4,000 for good sometime soon and so we want to keep our foot on the bullish gas pedal.

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