Stocks finished up after Friday's session, but that's not the surprise, at least not for me. What surprised me was the strength in the Dow transports. That index closed at its highest level since early April. It's now getting close to the 50-dma curve faster than I anticipated.
Here's something to keep in mind: there's a meeting of the Fed next week. If there's going to be a rate cut, they'll announce it Wednesday. Are we seeing some traders betting on a rate cut by buying in the days prior? I don't know, but it's a possibility.
The real test will be the 200-dma. If the transports can break through that in the next few weeks, then I suspect the market will be off to the races. We'll have a bull-market summer, an oddity but not unheard of. An interest rate cut would probably be sufficient to make that happen.
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