The market melt-up continued today with the Dow Jones industrial average, S&P 500 and Nasdaq all hitting new all-time highs. Breadth was good, but there was little movement intraday and some traders referred to the action as dull and boring. Volume was fairly light with the S&P 500 exchange-traded fund (SPY) well below its 50-day average level.
There are a couple of things that are remarkable about this action. The first is how lopsided it is. There are very few dips or pullbacks. It is just steady buying, which is an indication that it is primarily driven by passive investing and computerized trading.
The second notable issue is the lack of Euphoria. Typically, when the market moves in a parabolic fashion there are euphoric responses among individual investors. There are some signs of excitement, but this is not a market where traders are running around giving each other high fives. The more common response is some grumbling about how difficult it is to keep pace with the action.
The narrowness of the action with a small handful of big caps seeing most of the buying interest also complicates things. There are some very good movers among secondary stocks, but stock picking is quite challenging with few easy entry points.
The question everyone continues to ponder is how much longer this one-way action can continue. No one knows for sure, but those who have tried to apply reason and logic have had little success. As Yogi Berra once said "it ain't over till it's over."
Have a great evening. I'll see you tomorrow.