Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
After a one day respite we are back to the pattern of the past week and a half or so. Big caps continue to lead, while a lot of stocks are left behind.
S&P +0.2% vs Russell 2000 -0.2%
The market continues to act fine at the index level, as the S&P 500 creates some energy to break to go test that 1370 level of lore. The Dow keeps playing with 13,000 which is nothing but a round number. VIX continues to fall through the floor after spiking a bit earlier in the month.
Yesterday’s rally helped the transport regain their 50 day moving average but oil continues to creep higher, and at some point it will matter if this continues. We’re already looking at the highest gas prices for this time of year so certainly once Memorial Day hits we know where prices are heading and just like 13,000 has a psychological impact so will $4.00 (or $4.25 / $4.50).
But for now it’s just a methodical up or sideways trade with nary a selloff. Next week we have our second massive gift from the ECB with LTRO 2.0.
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Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund’s holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/holdings/blog
