Last week was a grind. After the $SPY rallied from $273 to $293 in 5 trading sessions, this past weeks sideways chop, while frustrating, set the market up for that next move higher.
We have this past week to thank when some of those sideways stocks finally break higher this week.
The VIX is nearing that 15 level again. The $SPY is sporting a nice bull flag. Small caps are starting to act better. Interest rates are going to remain low for that much longer.
While there remains so many reasons/ excuses to sell, the reason this market keeps heading higher has nothing to do with the price of tea in China....after a 25% tariff. Cheap money = everything.
Low interest rates = more debt + more buybacks = higher stock prices.
It's no coincidence that with interest rates low, corporate debt grew to a new record high this year... right along with the stock market.
Sure the market is going to collapse if/when interest rates rise and this massive debt becomes serviceable... but why fight it here with Central banks around the globe still hell bent on keeping the market happy?
$SPY flag into next week:
$QQQ also saw price compression last week - setting up for a sharp move this week :
Here is one stock I like this week and one stock I think is setting up for a fall.
$SQ - finally looks ready to break out.
This stock could get back to $100 in a hurry. I'll be looking for calls to take advantage of that possible move. Timing will be key.
$TGT - has been on a post earnings tear. While I don't like getting in front of a stock when it has this type of momentum. It has run into a possible double top. As long as it remains under that level early next week I'll be trading it for a move lower over the short to medium term.
Have a great rest of the weekend and a Happy Fathers Day.