Did Friday’s Big Rally Change Anything?
What a nice day for the bulls on Friday. In the morning blog, I discussed the possibility of the Q2 bottom being in versus just a better bounce and then final low in May. Regardless of the scenario, the plan was to position for higher prices and then manage risk.
It didn’t take the S&P 500 nor NASDAQ 100 long to exceed last week’s peak. It happened faster than I thought. While it’s not clear sailing from here, there should be some additional upside coming,
Looking at the NASDAQ 100 below, we know that Amazon, Microsoft, Google and Nvidia are back to getting a lot of attention. It didn’t take long. Apple and Tesla remain on the injured reserve and need some serious healing.
Friday’s big rally in stocks came with a small drop in bond yields, but the U.S. dollar was still solidly higher. It needs to stop going up for a long-lasting equity rally to occur.
You know what else was strong out of left field? Semiconductors. From death’s doorstep, they are up 10% in just over a week after falling sharply from the March peak. This is an important group to watch for clues about another decline or not.
On Friday we sold EMB, levered S&P 500 and some levered NDX.
