Follow Through

Wow - this market just doesn't quit. The S&P 500 is closing in on the May high which would also be a 5 year high. Mid and Small cap names act well, too, but not with the same strength as the blue chips. There certainly feels like a flight to quality however, large caps lagged the last year of the rally and perhaps this is nothing more than reversion to the mean, for whatever reason.

Commodity prices have fallen hard and that is probably helping the bullish equity case. There are many bullish stocks (on a technical basis), too. It's a peculiar market as just a few months ago the fundamentals looked lousy yet now the market is in gear. Just how far the market is looking ahead is an unknown but it's got to be quite a distance. As a friend said, "at least past the coming recession".

Having spent a few days in DC this week, I can also report that the opinion there is that the President/Administration will be doing what can be done to pressure oil prices lower in order to help results for the the November election. And that would be helping the market as well. Is it possible that the powers that be can talk oil prices down for 60 days? If it is, then we should expect more of the same from the market. And then we are in the seasonally strong part of the year...

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