On the technical side, the deterioration in the intermediate-term indicators have all pointed to a "spring swoon," but all we've gotten has been group rotation. Even the Russell 2000, with the terrific week it just had, is still trading at mid-February levels.
In sum, there was plenty of news that might have taken the markets lower in most other environments; the indices simply did not follow. Many readers would like me to explain how so many Dow stocks can gap down without bringing the Dow itself with it. I cannot.
But I do believe that's why we find ourselves with a market at the highs that lack any giddiness. We even saw plenty of bearishness a week ago, though that sentiment has subsided. So if we now see some market downside, we'll be sure to hear all those "Sell in May" calls, and sentiment is bound to switch right back to bearishness.
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