Imagine the chair as the market.
Despite what many believe as impossible odds, the market sits, although somewhat precariously, near the record highs.
The water streams down, representing the market’s chance of slipping.
Yet, the rockledge offers the chair enough leverage to resist the water’s gravity.
The hat hanging on the back of the chair is we investors.
We have put our faith against the odds of slipping. At this point, we assume that the water will dry up and the chair will take root.
After all, the market has endured terror attacks, government scandals and isolationist policies.
Sister Semiconduictors, A.K.A Wonder Woman has lept tall buildings in several bounds. Nasdaq 100 consolidates near its new all-time highs.
The Dow looks one nod away from moving above 212 and establishing its new all-time high.
The S&P 500 may not have “launched from 240, but it has certainly snapped.
Great news for the momentum stocks or as Geoff mentioned, “those in motion that have stayed in motion.”
I do not mind sitting in that chair. However, I require a cushion for my bottom.
How thick does the ideal cushion have to be to offer our bottoms more support?
Two crucial members of the Modern Family are the cushion bearers the market and our bottoms desire.
The Russell 2000 or the small cap companies located and operating throughout the U.S. personify the Family’s Granddad for very important reasons.
For the next leg of this rally to occur, IWM must show up with a convincing cushion. That would prove that the market has faith beyond the tech and FANG stocks.
IWM is the lining of the cushion. A run over 140 that sticks will convince investors that the U.S economy will continue to grow.
A rally in the Russell’s could also signify the beginning of the 5th Stage of Disbelief. Remember, this market begs for a dramatic finish.
Yet, we have time to worry about that.
If the Russell’s are the lining of the cushion, then the Transportation sector is its stuffing.
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