The push back to new all-time highs on the S&P 500 (INDEXSP:.INX) continues to be dominated by the financial sector and related stocks.  The recent push higher has been supported by the recovery in European stocks after the Italy referendum.  Small cap stocks and the Russell 2000 Index continue their outperformance.
Two concerns that investors need to watch are market breadth (which is okay but not great) and the NASDAQ. The latter had a strong day but has been a relative laggard. Bulls hope to see more tech strength.
This leg of the rally is a bit long in the tooth but needs to be respected given the seasonality and the structural progress. This may allow for further gains until breadth concerns and uber-optimism give way to a pullback.

 I see a bit more upside here but some prudence is advised into these highs as the market is getting overbought near-term. A pullback should provide investors with better entry points.
The Russell 2000 Index (INDEXRUSSELL:RUT) continues to gain ground. A minor pullback attempt only lasted around four days before pushing back to new all-time highs (on an absolute and relative basis). Â Check out the relative strength chart of the Russell 2000 vs the S&P 500 Index below. It shows the upward parabolic move in the Russell 2000 since early November which has now gained over 16% from trough to peak measured from the 11/3/16 lows. Â There aren’t any signs of weekly exhaustion just yet, which indicates that any pullback attempt in the near-term should prove short-lived and buyable.
Note that you can catch more trading ideas and insights from me over at my site, Newton Advisor.  Thanks for reading.
Twitter: Â @MarkNewtonCMT
Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
