Commenting on the Russell 2000 testing its precious recovery high and today’s trading Gorilla Trades strategist Ken Berman said:
Russell 2000 Testing Its Precious Recovery High In Early Trading
The major indices are mixed and flat at midday following a choppy but active morning session on Wall Street. Stocks are holding on to most of their lofty gains from yesterday, and small-caps continue to push higher, with the Russell 2000 testing its precious recovery high in early trading, which is a huge confidence boost for bulls. Fed Chair Jerome Powell called for more stimulus from Congress yet again this morning, playing down the risk of “overdoing” the fiscal measures in the post-lockdown period, as inflationary pressures remain muted.
Despite Boeing’s demand warnings, and the rising number of global COVID cases, the hardest-hit industries surged higher in early trading, as the outlook for the domestic economy remains strong and the number of U.S. infections ticked lower. In economic news, the JOLTS job openings estimate was in line with expectations, edging lower to 6.5 million compared to last month’s reading of 6.7 million, but the measure still points to healthy job creation amid the reopening push. The trade balance hit its widest level since late-2006 amid the weakness in global trade, but currency markets remained stable this morning, with the dollar hovering around its recent two-week low.
Dow: 28,216, + 67 or 0.2%
S&P 500: 3,407 - 2 or 0.1%
Nasdaq: 11,284, - 48 or 0.4%
Russell 2000: 1,599, + 17 or 1.1%
Market breadth has been relatively strong this morning, with advancing issues outnumbering decliners by a 7-to-3 ratio on the NYSE at midday. Only 6 stocks hit new 52-week lows on the NYSE and the Nasdaq, while 150 stocks hit new 52-week highs. The major indices have been hovering around their daily VWAPs (Volume-Weighted Average Price) throughout the morning session, pointing to a mixed and choppy afternoon. Cyclical and growth-sensitive issues have been very strong today, thanks to the improving COVID-related sentiment and while the tech and healthcare sectors have been severely lagging behind, the odds of a broad-based rally continue to increase. Stay tuned!