The rally continues as the narrowness persists. Communication Services (XLC) led the charge on Friday, followed by three of four stocks in the media and entertainment subsector (META +5.87%, GOOGL +2.87%, GOOG +2.44%, while MTCH dragged -0.34%).

Market breadth was mostly even, but the uptick in volume on the NASDAQ Composite highlights the frenzied nature of investors chasing performance at the moment.

Market Breadth	NYSE	NASDAQ
Advancers	1,189	1,913
Decliners	1,609	2,215
New Highs	124	143
New Lows	58	162
Up Volume	1.08 billion	2.68 billion
Down Volume	1.15 billion	1.39 billion

Unique Rally

Not only has the market rally continued with less liquidity…

....there isn’t enough liquidity to power the entire market, and the S&P 500 equal weight has sunk more than the S&P 500.

It's all about momentum. If buying spreads beyond a few stocks, the focus will still be on names that can shift into high gear quickly.

Silver Lining

The best part of Friday’s session was that the market closed higher, with Nvidia (NVDA) down almost 2%. However, the Moving Average Convergence/Divergence (MACD) is still elevated, and money flows are dropping.

As shares trade above $117.00, the uptrend is intact. A close below $108.00 could be a huge red flag and maybe test whether investors are willing to keep chips in play or move to the sidelines.

It’s a Huge Week:

• President Biden Watch
• Inflation & Fed Watch
• Earnings Season Kicks Off

Today’s Session

Looking for momentum to continue today as the S&P 500 looks to be moving out of a short consolidation period. RSI and MACD hint at overbought, and money flows are slowing.  But the bias is undeniably to the upside, and we can’t fight that.

No love for mid and small caps. Life is not fair.

We get NY Fed Consumer Expectations early this morning and the focus is on one year inflation.  It could move the market.

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