Market participants were shocked when the number of new jobs created in May beat forecasts by about 11 million. It was expected that there would be a loss of about 8.5 million jobs but instead, there was a gain of around 2.5 million. This is the biggest surprise in job creation that has ever been reported.
The indices have leaped higher and anticipatory bears and underinvested bulls were caught by surprise once again. Quite a few strategists have been thinking that the indices were close to a turning point but that skepticism keeps feeding, even more, buying when it doesn't come to fruition.
This has been a truly historic period in the stock market. I can not remember a time when more 'big name' investors, such as Warren Buffett, have not navigated the market very well. Numerous billionaires and hedge fund titans have been poorly positioned as this market has seemingly been disconnected from what is going on economically
After the economic numbers today and the major shifts that have occurred in Covid-19 statistics over time, you can't help but wonder about the ability of 'experts' to forecast. The data has been widely incorrect but the stock market seems to have done a pretty good job of figuring out the truth.
The indices are hitting intraday highs at midday as the bears throw around the phrase 'blow-off top' with great hope, but there simply is no reason yet to try to predict a top. The top callers have been wrong for months now and there still is no solid evidence that momentum is about to slow.
I commented on this earlier this week that the market isn't going down on bad news so maybe it will eventually go down on good news. The good news today isn't being sold but we have to stay vigilant and see if the positive price action continues.
On days like this many traders find themselves frozen. They feel it is too extended to chase but too strong to short so they end up not doing too much. There just aren't a lot of news buy setups when you have a stock like American Airlines (AAL) which is up 90% in two days.
With accounts at highs, my main focus is to keep them there and not take on high risk. I'm still a buyer but am selective.