Small caps followed the move too, and even the XLF and the XLE ETFs, which had shown bearish signs in past days.
Money remains centered on US equities. Canadian equities followed the same trend, but with a much less bullish money flow. This tells us that liquidity and momentum are centered in the US, while Canadian investors are more value investors.
Biotech did not attract buyers yesterday. There could be some negative issues with the Tax deal around drugs and biotechs. An IBB Breakdown on volume should be shorted.
Note that both the 10 Years and the Yen are still bullish, which in itself is negative (carry trade unwind) but the tax deal hopes are too strong for now.
Also note below that Gold pushed slightly higher on the NK missile test, but large buyers are discounting the move.
Conclusions:
For now, a breakout is a breakout. The trend is up and we are entering the bullish Christmas season.
The NK and the carry trade unwind are no match against hope for a tax deal.
The only question that is left is whether or when a sell the news move will occur: before or after the tax deal is voted?
