For all of you college basketball fans, March Madness has arrived! For all of the investors and traders out there, will the bullish madness continue? I guarantee the short interest is exhausted and asking that exact question.
On the week, the Dow Jones Industrial Average (chart) closed basically flat at 12977, The Nasdaq (chart) closed the week up 0.42%, the S&P 500 (chart) +0.28%, and the small cap bellwether Russell 2000 (chart) lagged this week falling almost 3%. However, these key indices are off to the best start to a year ever and it seems like every time the market wants to sell-off, it is met with unprecedented support. I have been around these markets for almost 17 years and I cannot remember such resilience in equities. Call it an election year, call it an improving economy, call it that Europe is out of a catastrophic state, call it what you want, this freight train doesn’t seem to want to stop.
Technically speaking and according to the Relative Strength Index (RSI), the markets continue to trade near the upper end of overbought conditions, however, investors and traders alike don’t seem to care. Personally, I think a meaningful pull back in equities and commodities are long overdue, but I too have been expecting this for weeks now. One thing I know for sure is that the markets do not always give you what you expect when you expect it, so whether you have a long or short thesis, it’s best not to try to time the market. In closing and as a reminder, it is usually a good idea to keep protective stops in place should your position move against you.
Have a great weekend 🙂