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Stocks notched a nice recovery rally today, with the indexes up around 2% to 2.25% in late trading.
But to be clear, I’m not inviting everyone back into the water just yet.
I need to see more from the tech sector before making that call. Sure – tech, as tracked by the XLK ETF, is up close to 1.9% on the day, but zoom out (as always) and you find the sector is off more than 12% for the month and more than 20% from its 52-week high. The sector is nowhere near resuming the leadership position I like to see it hold in a bull market.
What’s most interesting to me right now is the action in Bitcoin. It’s up more than 8.6% against the greenback this month, but here’s the thing: more than 4.7% of that gain stacked up in today’s trading. So the big question there is: are we seeing the early signs of the market getting its risk appetite back? Or is the grandaddy of alternative assets just decoupling completely from stocks? We’ll look at that tonight.
And we’ll look at consumer staples, too – a textbook defensive sector that’s home to a few decent setups right now. I don’t think they’re evaporating anytime soon.
As strong as these look, if stocks can finish near their highs this week, it could force the bears to play defense in the short term.
There’s a lot to unpack here, so let’s get into it…
