Bullish run on equities grips the market

Today’s market action continues the bullish run in equities. All the major indices are higher. There are three stock sectors down on the day: energy, oil & gas explorers, and semiconductors.

Natural gas getting clobbered explains the energy and explorers complex. Semiconductors are an interesting outlier.

Semis had been on a tear this entire year, leading most of the sectors.

SMH daily chart

However, one can notice a turnover on the hourly chart, which is also what led Wall Street to AMD puts.

SMH hourly chart

We should also note that the IWM now closed daily, and could close weekly above the previous swing highs. You get more than one week closing above that level and you’ll see money pile in (maybe before).

IWM daily chart

Keep the $160 level in your mind for reference.

Lastly, volatility continues to contract. The VIX is down below $12, with the VVIX down below $89. Once the VVIX turns around then I’ll start looking to go heavy on UVXY long positions.