The first shot was heard round the world today as the U.K. administered the first government-approved COVID-19 vaccine to a human patient in history (more below). Stocks erased earlier losses to close higher, sending the S&P 500 and the Nasdaq to new record highs. The S&P 500 closed above 3,700 for the first time ever.
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Shares of Pfizer (PFE), the maker of the vaccine administered today, rose 3% on the news, and the recovery rally resumed with oil and energy stocks leading the gains, while homebuilders were among today's biggest losers. Gold prices were back on the rise as Bitcoin prices fell for the second day in a row. Those two have been alternating between gains and losses for the past month, and the speculation is that Bitcoin's rise has been at the expense of the precious metal.
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I know we ask you to participate in surveys frequently, and you are so generous with your time and thoughtfulness. We do this to better gauge your sentiment and we also do it to share how smart our viewers are with the rest of the world.
Has the Smart Money Left the Party?
Sentiment is a tricky thing, especially when it is all leaning in the same direction. You are bullish on U.S. equities, according to our recent survey. So are other individual investors and so are institutional investors. As we've said in the past, that can be a contrarian indicator. The Smart Money Index (SMI), popularized by money manager Don Hays, postulates that emotional trading takes place at the beginning of the trading day (as traders react to overnight news events and economic releases) while the "smart money" takes the day to evaluate price action and input their orders before the market closes. That's sometimes why you see early morning rallies fade into the close.
As SentimenTrader points out, the "smart money" seems to be sitting much of this recent rally out. Even as stocks ticked at records last week, the SMI was languishing near its lowest level in a year. It's unusual to see stocks rally so hard and the SMI sell off like it has been. If stocks continue to grind higher, however, the smart money may not seem smart and the wisdom of the crowds may win out.
First Shot and a Giant Step
Today Coventry U.K. resident Margaret Keenan, seen above, became the first person in the world to receive an authorized COVID-19 vaccine. The 90-year-old British grandmother, who was administered the Pfizer/BioNTech shot, said, "It’s the best early birthday present I could wish for because it means I can finally look forward to spending time with my family and friends in the New Year after being on my own for most of the year."
AstraZeneca and Oxford University said today that its vaccine tests on a peer group provided protection against severe COVID-19, although more analysis will be needed to see how well it works in older people, among those at highest risk in the pandemic.
We are getting closer. Here's the latest in vaccine developments: