Stocks continued to march higher with less volatility as optimism arise from wider vaccine availability and declining Codv-19 cases. Federal Reserve Chair Jerome Powell also eased investors' concern by reiterating Fed's commitment to the low interest policy on Wednesday. On the sector front, communication and energy stocks outperformed while consumer discretion stocks lagged behind. For the week, S&P 500 index went up 1.23% to 3934, Dow Jones Industrial Average gained 1.0%, and the technology laden NASDAQ composite index increased 1.73%.
After two weeks of higher volatility trading, S&P 500 index advanced above 3900 to a new high with a narrower range. The index is not fart away from 4000 and could reach the level in a couple of weeks barring major disrupted events which we can't see any on the horizon. The one concern most analysts have is the high valuation of the stocks, and the chart has been telling us that the index is in an extreme over bought condition for a while. We have been on the caution side since end of last year, reducing market exposure as the index goes higher but not out of market for risk management. Our view of the market direction has not been changed but we will continue to monitor the market development and adjust our market assessment accordingly.
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