The indexes built on Tuesday's strength with small caps, as seen in the Russell 2000 fund (IWM) , leading with a gain of about 1%. Breadth was around 4,550 gainers to 3,550 decliners which isn't great, but what is most surprising about this market is how quickly the buyers jump on any dips.
Retail sales numbers came in higher than expected this morning, which gave the bears more ammunition, but higher interest rates don't seem to bother the bulls now. Bonds struggled as yields increased, but stocks just kept plugging along.
If you are a fully invested long-term investor, this sort of action is fantastic. In fact, if you are already heavily long, then nothing is better than a market that goes straight up every day. Most investors are not in that position. Astute traders are looking for good entry points, and action, like we have seen lately, doesn't produce many. If you want to put substantial cash to work immediately, you will be forced to chase some unattractive entry point.
The business media fails to recognize that it isn't just bears that root for some market downside. It is more likely to be bulls who want to put money to work who want pullbacks rather than this lopsided, illogical action.
It is important to remember that price action is king. That is the only thing that matters when it comes to paying the bills. A smart bullish or bearish thesis may provide some intellectual comfort, but the market really doesn't care how smart you might be.
We have housing starts, the producer price index, and weekly unemployment claims on Thursday morning, which should cause some market movement, but this market is laughing at hawkish economic news right now. That won't last forever, but it will last long enough to make you feel very dumb if you are fighting it.
Have a great evening. I'll see you in the morning.
