1. Consolidation Phase
Let’s start with the blinking screens and the overall state of the stock market. While I am likely to get tagged with a “Captain Obvious” label here, I think the most important thing to note about the current trend of the major indices is that with one exception, they are all stuck in a sideways consolidation phase.
So, for the , , Smallcaps, and the Midcaps, we’re dealing with a range-bound market. The range is fairly obvious for the S&P, with the high end up at 3230 and the low end down around the 2965 zone.
My take is that the major indices have been digesting the massive run that began on March 24, 2020, and will likely continue to do so for a while.
This sideways action can be seen everywhere except and , which, of course are dominated by the megacap tech names that are #winning in the COVID world. A quick glance at a chart of these to indices tells the story here. While the rest of the indices are going nowhere fast, the NDX is trending up…