📈 State of the Stock Market

Zoom out to start the week.

Index Review

Let’s orient ourselves to start the week by taking a look at the major indexes and where we are seeing outperformance.

To start, the S&P 500:

We registered an all-time weekly high close last week. The index looks like it is breaking out but we want to see follow through above the wick of last week’s bar and a close above it.

Technically speaking, we are looking strong here.

As for the Nasdaq, we are not seeing the same strength. While we did see a green bar last week, we are not at all-time highs like we are in the S&P 500.

We have gone over this many times, but as a reminder, when we have explosive market conditions, tech stocks lead the market. Based on what we are seeing between the S&P 500 and the Nasdaq here, we are not seeing that (yet).

One specific sector I want to focus on is consumer discretionary. We are seeing this sector lead. This does not happen in recessionary conditions. If consumers truly were weak, consumer discretionary would be the first expense consumers would cut out of their budget.

I do think it is important to watch this sector over the next few months because it can be a bellwether for the economy.

Keep these themes in mind as you trade this week. For more analysis on what I am seeing and what I am trading, watch this video: