The S&P 500 hit new all-time highs and it is now up 5% for the year. The Nasdaq 100 accelerated lifted by the big five tech stocks that now account for 50% of it - AAPL, AMZN, GOOGL, MSFT, FB.
Stock splits seem to be moving prices again. A Deja Vu from the late 90s. In theory, a stock split should have zero impact on a price. In practice, it has done crazy miracles. Apple announced a 4 to 1 stock split, then the company hit a $2 Trillion valuation and kept going. Tesla went up almost 50% after announcing a 5 to 1 split.
In the meantime, the small-cap ETF Russell 2000 tested its 20-day moving average and market breadth hasn’t looked this bad in a long time. Will it matter this time? In a strong bull market, such divergences can be resolved through sector rotation. The small-caps can bounce next week and everything will be forgotten. We saw it numerous times in the past few months. Just when a sector was looking ready to roll over, it woke up and jumped higher. Software and biotech are the most recent examples.
The market continues to provide incredible trading opportunities on a daily basis. Here are just a few of the ideas and comments I shared with subscribers last week: