This year’s rebound and rally has not been just easy money. Many of the biggest winners are stocks you have never heard of. There are a bunch you have heard of, such as Tesla (TSLA), that are not a part of big equity indexes.  But, the majority of stocks are not up this year. It’s easy to say the Fed flooded the market with cash, but only 200 names in the S&P 500 are higher for the year. Even the NASDAQ juggernaut has more losers than winners (surprise).  

Individual investors have not been irrationally exuberant this year or even last year. The last time individual investors were confident and bullish about the stock market, was in January 2018.  Just because the market is higher, it’s folly to assume it’s a product of irrational exuberance.

As the economy recovers and vaccines emerge, buying in the market will broaden out and we will see true hysteria. More buyers in the market will lead rotation into underperformers and slower growth in hot stocks and sectors. This will make it appear as if the broad market is lower when there will be greater participation.

All but 2 of the 11 S&P500 sectors in the green. Energy is leading the way, as oil production has temporarily ceased on the U.S. Gulf coast, as preparation are being made for Hurricane Laura and Tropical Storm Marco. Healthcare and Real Estate lagging.  

Gold and gold miners are lower on the day as well, as Gold drop to $1931.35 per ounce.

Breadth is positive, up volume leads down, and new highs out pace new lows.