• S&P 500: +1.23%
• Russell 2000 (RUT): +1.69%
• NASDAQ Composite: +1.33%

It was another solid session that saw the dam break as fence-sitters began to panic and piled in ahead of the closing bell. These strong sessions from yesterday still couldn’t produce more new highs than lows. But there were only 15 more lows than highs on the New York Stock Exchange (NYSE) and 55 more on the NASDAQ Composite (see chart).

Market Breadth	NYSE	NASDAQ
Advancers	2,624	3,506
Decliners	719	1,190
New Highs	52	57
New Lows	67	112
Up Volume	3.73 billion	4.50 billion
Down Volume	1.16 billion	978.34 million

Heat Map

Buyers are spreading it around nicely, although Amazon (AMZN) stands out as investors are eager to be ‘long’ ahead of the stock split. The Exchange-Traded Fund (ETF) Heat Map underscores heightened risk associated with those inverse ETFs.

S&P

ETFs

Small-Cap

The Russell 2000 continues to move higher, but today will be a big test. The Three White Soldiers candlestick pattern underscores resolve, but it also attracts shorts, and it often comes up short (see Jan and Feb).

Also, I would like to have seen more volume.

We need to see the iShares Russell 2000 ETF (IWM) close above 208 on strong volume, which has been a tall order all year, especially on a Friday. But then again, that’s the perfect test. On the downside, we need to see 201 holds.

I’ve been very impressed with the market the last few days, but we have to keep a level head. There will be bear market bounces, but the market is so oversold that we can make tons of money even for buy-and-hold investors.

Portfolio Approach

There are no sector weighting changes this morning in our Hotline Model Portfolio.

Today’s Session

We are awaiting headlines from the call between President Biden and Chinese counterpart Xi Jinping.  There are also reports , including existing homes, which I’m very interested in, as mortgage rates surge.

Meanwhile, JP Morgan lowered its target for the S&P 500, but it urged investors to buy the dip.  I bring this up because the market is significantly below the consensus target of 4,904.  Keep in mind, these consensus estimates are almost always too low.

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