Stocks are grinding to new highs today, on the back of a weaker dollar, stronger commodities, and a rise in 10-year Treasury rates. We're seeing particular strength among small cap issues, and this is reflected in the rise in the number of stocks registering fresh 65-day highs (over 1500 so far today). Today also provides us with new bull highs among most of the sector and index advance-decline lines.
The breadth of the recent strength (advancing stocks outnumber decliners by over 1200 issues as I write) is providing some momentum to the recent rally. We see a recent pattern in which weakness early in the day is met by buying interest. I interpret this as a continued pressure among money managers to put money to work and show their clients meaningful participation in the risk rally.
We've seen quite a few questions about the rally from a fundamental perspective, but as long as sideline capital is buying risk assets and those intermarket themes are in play, stocks should continue to experience support.
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