The Band Plays On

Every week, MrTopStep invites traders to an "Own the Close' contest where the closest guesstimate where the SPX will settle on Friday’s 4:00 cash close.

The winners get a free week's access to the MrTopStep Chat and trading tools. Enter your guess now!

Our View

I remember on the floor — and more specifically, in the S&P 500 futures pit — when the S&P (SPU) broke through a big level, the desk and pit clerks desk would be cheering and throwing trading cards up in the air. 20 feet away, Rick Santelli was on CNBC talking about the milestone. 

Sure the markets are roaring higher, but the public doesn't seem to be cheering. I know sometimes I get overly concerned, but I was there for the crash in 1987, the 2000 tech bubble and every other crash after the markets went too far in one direction. 

That said, the band plays on. The S&P has been up 5 weeks in a row and is up 5.4% to start 2024. It not only closed above 5,000 for the first time on Friday, it almost took out 5,050 while it made its 10th record daily high for the year. It’s up 14 of the last 15 weeks and has gained more than 22% in that span. The Nasdaq is trading above 18,000. 

I continue to be a bull and look for higher prices, but I also am just amazed at how shallow the pullbacks have been. I think that's what's so troubling. The buyers are relentless and even when it does fall it doesn't go down much and almost always recovers that day or the next. 

Thus the question: Is there any real reason to be looking for a high or to be bearish? Simple math says when the markets are rolling like they are, you are supposed to keep rolling with buying the weakness until it doesn't work. 

It's not just the ES and NQ that are moving…oil was up 3%, Bitcoin traded above $47,000, and Treasuries inched higher. 

This week we have 13 economic reports and 15% of the S&P reporting earnings. All eyes will be on Tuesday’s CPI report and then the PPI report on Fryday's monthly options expiration, which has the Nasdaq up 13 out of the last 20 occasions the day before President's Day weekend, while the S&P is up 10 of the last 13 occasions.