The market followed through to the upside this morning as it continued to celebrate the dovish Fed. Quite a few bears were grumbling about how ridiculous this move was by Chairman Jerome Powell, but the big money players just smiled and waved at the pessimist in the rear-view mirror as they continued to buy.
The indexes were a bit overbought after the gap-up open, and that lead to some mild profit taking until about midday. Once the flippers and short-termers were taken out, the buyers stepped back in and had the indexes at the highs when the closing bell rang. Breadth was superb, volume good and new highs expanded to very impressive levels around 850.
This is a market that is trending and hitting new highs. That is really all you need to know right now. There are all sorts of bearish arguments about why disaster awaits, but the more productive approach is to worry about what might go right rather than what may go wrong.
Gold continued to lead the way higher and oil jumped on Iran drama, but small caps were a bit weak, semiconductors were turned back at resistance, and banks were better still dealing with yield-curve issues.
This is a market where it is very easy to talk yourself out of staying with the long side. We had lousy Philly Fed numbers this morning, and the Fed isn't on the brink of cutting rates because the economy is too strong. China trade is still very uncertain, but stocks are going up and the price action continues to tell us that we should still stay with the trend.
Have a good evening. I'll see you tomorrow.