The S&P 500 and Nasdaq Composite eked out new closing highs on Monday in yet another trading affair that was short on volume, short on participation (the advance-decline line favored decliners at both the NYSE and the Nasdaq), and decidedly short on volatility.
While the trading action itself was subdued, there was a lot going on still beneath the surface.
The Dow Jones Transportation Average declined 1.1%; the S&P 500 financial sector declined 0.1%; the Philadelphia Semiconductor Index dropped 0.4%; and the Russell 2000 fell 0.4%. In other words, Monday's record highs were more like broken-record highs.
It wasn't a sweet album of bullishness so much as it was a playback of the top-selling hit recorded by Apple (AAPL), which jumped 2.7% to a new record high and carried enough weight to keep the major indices in-line along with a few backup singers like Alphabet (GOOG) and Facebook (FB).
In another respect, though, it was the CBOE Volatility Index that stole the show. It buckled 7.6% to 9.77, marking its lowest close since December 1993 and representing an accepted belief that it should be smooth sailing for the stock market in the very near term.
It may very well be, yet participants shouldn't lose sight of the fact that the rose-colored view of matters is a latent risk itself. What it suggests is that a lot of people will be offside with their positioning in the event something bad happens to upset the favorable outlook.
For now, though, bad thoughts are being tabled as clear signs of an acceleration in earnings growth and the the prospect of tax reform have continued to win mind share among market participants.
Today's open is expected to feature a modestly positive bias.
The S&P futures are up three points and are trading 0.1% above fair value. For the record, Apple is up another 0.4% in pre-market trading and the CBOE Volatility Index has slipped another 1.8%.
An encouraging traffic update for April provided by United Continental (UAL), stronger than expected trade data for March out of Germany, a rebound in European bourses, and the resilience of Apple are among the supportive influences in the early-going.
The economic calendar features the JOLTS Job Openings and Wholesale Inventories Reports for March, which are slated for release at 10:00 a.m. ET.
Neither report will move the market, which has been moving along in a very deliberate fashion these days, enjoying the support of some of its most heavily-weighted stocks as it deliberates over valuation and the narrowing leadership.