Momentum indicators have continued to gain strength. The wall of worry is intact, and the market keeps climbing. If you are in cash, maybe you are too focused on the news rather than market conditions, writes Jordan Kimmel, founder of MagnetInvesting Insights.
(Editor’s Note: Jordan is a new contributor to the Top Pros’ Top Picks roster. I hope you enjoy his commentary.)
The market is supposed to ebb and flow…but all we see these days is flow. The Advance/Decline on the NYSE just hit another new high, while the Nasdaq is still surprisingly weak. The 52-week new-high/new-low numbers look better.
Data by YCharts
The infrastructure buildout is an established and much talked about trend now. It is real, and there are a dozen market leaders in this area. The problem is most names are currently overbought.
Meanwhile, there is tremendous strength and activity in the biotech sector. I would not have any shorts in this sector. Look for a lot of merger activity.
Earnings season is also in full gear this week. Remember it is more important how a stock reacts rather than what the company says about the past.
Finally, maybe it is time to stop focusing on the Fed and own shares in the best companies in the best sectors. Is anyone excited to lock in a 3% CD? Not when the markets look like this.
