It was a solid week for the indices and for bullish traders. Growth stocks outperformed, stock-picking worked well, and worries about interest rates and inflation were forgotten. The S&P 500 and Nasdaq hit new all-time highs, and there was good breadth all week.
The Russell indices reconstitution took place at the close Friday, and there was a slew of huge blocks traded. A good example is a stock I've been discussing quite often, Ammo, Inc. (POWW) . The stock typically trades about 2 million shares per day. At the close on Friday, a block of 5.7 million shares traded along with a couple of others of more than 400,000. That is the number of shares index funds had to buy to include POWW in the Russell 2000.
There are about 250 other stocks that had similar type buying at the close.
The issue now is whether there will be some "unwinding" of that action next week. It is extremely hard to game, but the primary thing to keep in mind right now is that volume on many of your charts will have a temporary bulge that will mess them up.
The key thing right now about this market is to not overcomplicate it. We have an uptrend, things are not extended, and the usual bears have all their usual arguments about how disaster awaits.
This was a good week for stock-picking in part due to the Russell rebalancing, but I believe that we will continue to see favorable conditions ahead.
Have a great weekend. I'll see you on Monday.