News:
Markets posted another day of solid gains ranging from +2.8% for the Nasdaq to +1.6% for the Dow Jones.
Consumer Discretionary was the top-performing sector. Several retailer, including Macy’s (M) +19.3%, Dollar General (DG) +14.0%, Dollar Tree Stores (DLTR) +21.9%, and Williams-Sonoma (WSM) +12.8% provided better-than-expected guidance.
The gains were broad with Communication, Technology, Financials, and Industrials all gaining more than 2% on the day.
Real Estate was the only sector to finish in the red, and it was practically flat.
According to a CNBC report, housing inventory has climbed amid higher interest rates. And pending home sales declined in April.
Technicals:
The Russell 2000 represents the smaller cap stock. You can clearly see a breakout from its narrowing trading range on the chart below.
IWM Daily Candles – Chart via thinkorswim
That’s a positive sign for the bulls.
The VIX remains high, but other indicators are neutral ahead of the holiday weekend.
I’m not married to this rally. Daily gains of ~3% are not part of normal bull markets.
That being said I see no reason that the market can’t move higher … we’re just not in a bullish time of year.
Timing:
We are on the cusp of the Memorial Day holiday weekend.
Markets will be closed on Monday. Tuesday will close out the month of May.
Futures are up this morning. I expect lower volume as many people head to the beaches early.
Be on the lookout for a special Memorial Day message from us on Monday. And our June outlook on Tuesday.
Enjoy the holiday!
Watchlist:
^Open Position*AMR has support at $160
TNK has support at $20
CNCE has support at $5
^HDSN has support at $9, resistance at $10
SD is on watch
LPG has support at $16
PANL has support at $6, resistance at $6.65
MOD is on watch
SGML has resistance at $18
PLAB has resistance at $20
ESTE has support at $17
TTI is on watch
HRB has support at $34
UNM support at $34, resistance at $37
AR is on watch