As Usual, Stocks Push Higher

With stocks continuing to grind higher toward their 2011 peak, it becomes
increasingly incredible that the market, as measured by the S&P 500 has not
dropped at least 1% since March 15. Ironically, the next day the drop was even
more precipitous, sending stocks to their starting level of the year. Since
then, its been a pretty remarkable run a 6.2% gain in 15 trading sessions. That
run continued Wednesday, not in any spectacular fashion, and in fact, stocks
spent a portion of the midafternoon slightly in the red, before, well, doing
what they do rise. The Dow Jones Industrial Average ended 33 points higher to
12,427, the Nasdaq rose 9 points to 2800 and the S&P 500 added 3 points to
1336. During that time, its been difficult to find anything that isnt working
for investors. Energy stocks? Check. Industrials and building materials? Check.
Automobiles? Check. And thats just equities. Lost on no one, of course, has been
the parabolic rise in gold and silver, which are each setting all-time and
31-year-highs on almost a daily basis. (They did so again on Wednesday). With
such a run in stocks, one cant help but feel a need to take part in the ride
higher while also wondering when said ride will end (or whether it will). But
this is a difficult time for skeptics. Whenever it appears there is a crack in
the rallys armor, the forces of momentum gather themselves for another move
higher. Any cynical illumination of low breadth or low volume becomes fodder for
the next closing high. Thats not to say that those arguments arent valid. As we
mentioned in this space on Tuesday, the Nasdaq 100, rebalanced or not , does
look a little spent, and is actually down from one week ago. And its helpful to
keep in mind that the broader market also has yet to rise more than 1% since
March 21. Volatility has taken a back seat, and it seems difficult to imagine
another 6% runup by the end of April without some further tangible reason for
it. In the end, the last hope for a market correction of any scale may lie in
the banking sector, which curiously hasnt gone gangbusters while all around it
has. The Financial Select Sector SPDR (NYSE: XLF ) exchange-traded fund, in
fact, is still down almost 3% from its 2011 high, and is essentially unchanged
from late January. If things are so great, one may still wonder, why arent bank
stocks participating? On the other hand, why worry about it when easy profits
are to be made elsewhere?