It is no big secret the Federal Reserve is about to raise rates in December. Odds stand at 96% and the move in yields since Trump’s victory certainly signal the market is anticipating a rate hike. All the while the stock market has pushed higher. Russell 2000 has been up 9 out of the last 10 sessions as we continue to push into extreme overbought territory. Financials continue to be winners as they are large benefactors from higher interest rates. At some point, we would like to see a bit of consolidation, but we’ll be patient and take what this market gives us. It has been a great rally and if history is any indication we should see this rally continue.

Sentiment certainly has shifted to the bulls as the AAII survey was nearly 47% bulls. Bears were at 27% and those who were neutral have dropped into the 20s. We have not seen this many bulls in quite some time and after the move we have seen it is no real surprise the bulls showed up to the party. NAAIM exposure index sits in the mid-80s, but neither AAII or NAAIM are in extreme territory.

We continue to get new long signals and continue to build our long exposure. As mentioned earlier history tells us after a run like we have seen gains will continue 1 to 3 months. We are not seeing bearish action now and for those who are calling for death and destruction are just trying to sound smart. Simply run with the current trend and enter positions at proper buy points. It sounds simple, but for many it is a very difficult thing.

Shippers finally came back to earth as DRYS, SINO, and ESEA among others finally came back to earth. DRYS had been halted after running from $4 to over $100 a share. It closed at $11 today. I am sure those who were long at $100 are wishing they had not been so greedy. Congratulations to those who were able to capitalize on today’s move.

We have had a great week and hope you did as well! Have a great weekend.