The indices continued to inch higher this week, but the Russell 2000 (IWM) easily outperformed the DJIA. Small-caps, growth stocks, and speculative trading showed good relative strength against big-caps and the indices. Breadth was strong all week but slowed on Friday as some selling and repositioning took place.
The weaker-than-expected jobs report was shrugged off, and market players continued to show little concern about the surging number of Delta variant cases or the potential economic fallout. Ironically some slowing in the economy has been welcome as it offsets inflation concerns and doesn't force the Fed to be more hawkish.
The most notable aspect of the market this week was the great speculative trading and stock-picking. Traders were very upbeat and busy chasing lots of "junk" as well as some supposed short-squeezes. There was little concern about the macro issues that the pundits like to talk about all the time.
Overbought conditions of the indices did nothing to slow down the trading action. There has been concern that some corrective action in the indices would derail the recovery in the secondary stocks and hurt trading, but so far, there are no signs of that. The trading can be narrow and choppy at times, but it is robust.
Have a great holiday weekend, and I will see you on Tuesday.