The market exhibited a lot of spunk, but it was still tentative enough to give up a nice rally on Friday.  Light volume suggests to me there are diamond hands among large investors.  Newer retail investors are getting whipped around, especially as part of their psyche, if not actual portfolios, might be tethered to crypto, which really took it on the chin last week.

I do not mind selloffs on light volume.

But there was a defensive tone to the market, even as those non-profitable techs staged a strong bounce.  On Friday, financials were the best performing sectors followed by utilities.

President Biden lowered his infrastructure ask, but cut in areas where there was bipartisan support, which means maybe the process moved further not closer to reality.

Keep an eye on energy, which edged higher even, as crude oil struggled at a key resistance point.

S&P 500 Index		-0.08%
Communication Services XLC		-0.34%
Consumer Discretionary XLY		-0.50%
Consumer Staples XLP	+0.01%
Energy XLE	+0.21%
Financials XLF	+0.99%
Health Care XLV	+0.02%
Industrials XLI	+0.49%
Materials XLB	+0.22%
Real Estate XLRE		-0.17%
Technology XLK		-0.55%
Utilities XLU	+0.52%

Market Breadth

Market internals continued to improve but lack of volume = lack of conviction.

Market Breadth	NYSE	NASDAQ
Advancing	1,960	2,333
Declining	1,353	1,859
52 Week High	179	130
52 Week Low	17	31
Up Volume	2.28B	1.57B
Down Volume	1.84B	2.08B

These comments are short this morning, as I put a lot of work into our State of the Union call on Saturday and Payne’s Perspective out this morning.

I strongly encourage everyone to click here to listen to the event and ask your representative for the actual Payne's Perspective report, or email Info@wstreet.com.

Today’s Session

The market will begin the session a little higher in part to China’s announced crackdown on commodities.  At least that’s the headlines ,I think we could have seen a major inflection last week. 

Earnings Season

There are no major earnings out today, but I think those names that were snubbed after great results could start to move higher.

Without a doubt, the market has totally ignored possibly the greatest earnings season - ever.

S&P 500 Earnings Releases (476)	Revenue	Earnings
Beat	78%	87%
Blended Return	52%	13.3%

Key Breakout Points

The market has traded in a very narrow range, and most days have been relatively calm. But the wild sessions see deep swoons, and occasionally, buyers emerge. Still, for the most part, a lot of money is parked on the sidelines , not being seduced back into the fray. 

On the flip side, I’m also impressed that money in the market isn’t fleeing, and that means smart folks with big gains are still not convinced the party is over. Note: a close above the red resistance line should be a solid green light to buy aggressively. Conversely, bounce-off support is fine for trades but not long-term buys – at least not yet. 

Narrow Trading Range

S&P 500

NASDAQ Composite

Portfolio Approach

This morning, we are adding a new position in Consumer Discretionary in our Hotline Model Portfolio. If you are not a current subscriber to our Premium Hotline service, email Info@wstreet.com to get started today. 

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