Although the move ran out of gas early in the session on Wednesday, it was a broad rally with continued momentum in Technology and a bounce in Energy after a massive drawdown of U.S. crude oil. However, the Communication Services sector found traction as the rotation into momentum names continues.

Market breadth continued to improve with the declining volume on the NYSE and the NASDAQ (declining dramatically).  I like the cautious tone of the market, as the unloved factor of this rally continues to suggest a lot more to the upside.  

Symbol	Select Sector SPDR Fund	Last	Change	% Change	Volume
XLC	Communication Services	50.84	+0.57	+1.13	2.29 M
XLY	Consumer Discretionary	122.42	+0.44	+0.36	2.38 M
XLP	Consumer Staples	59.51	+0.38	+0.64	16.8 M
XLE	Energy	64.04	+0.81	+1.28	11.77 M
XLF	Financials	27.97	-0.10	-0.36	36.56 M
XLV	Health Care	93.46	+0.32	+0.34	5.35 M
XLI	Industrials	76.52	-0.18	-0.23	10.12 M
XLB	Materials	57.55	-0.12	-0.21	7.31 M
XLRE	Real Estate	38.26	+0.21	+0.55	8.59 M
XLK	Technology	80.25	+0.63	+0.79	10.11 M
XLU	Utilities	60.99	+0.14	+0.23	11.49 M

NASDAQ Breakout

When momentum names get hot, the NASDAQ leads the charge and that’s been the case this week. Of course, this poses a dilemma for investors that have missed the rally. You are going to hear a lot of mavens’ question buying at the top, but today’s top can be tomorrow’s bottom and the foundation for the next major leg higher.

The last two times the NASDAQ was breaking through a triple top, and where the mavens would have warned investors not to buy, were the following dates:

• January 2012 at 2,905
• July 2016 at 5,162

Sure, you would be buying the top here, but there’s a good chance a couple of years from now, you could look back and smile at buying a low entry point.

Line of the Day:

“we see the economy in a good place, and we’re committed to using our tools to keep it there.”

-Jerome ‘Jay’ Powell

The Fed is our friend, even if Powell had to use the word “origami” to say his watch will be different because there will be no recessions. 

Portfolio Approach

We added two Technology ideas yesterday.  We lowered our cash to 5%.  Click here to get started on our Hotline service today. 

Communication Services	Consumer Discretionary	Consumer Staples
1	4	1
Energy	Financials	Healthcare
1	2	1
Industrial	Materials	Real Estate
2	3	1
Technology	Utilities	Cash
3	0	1

Today’s Session

Futures zoomed on news Trump is giving up on rebate idea.

Futures pulled back when core CPI came in hotter than expected:

• Headline CPI +0.1
• Core CPI +0.3

Stock bias is to the upside amid record highs.  Watch for the Healthcare sector to outperform today.

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