This morning the market is going to make a new all-time high. Micron’s earnings have sparked buying in semiconductor stocks.

PRE-OPEN MARKET COMMENTS THURSDAY – Last week the market made a new all-time high after a 50 basis point rate cut by the Fed. Support has been confirmed this week and the breakout held. We needed to see follow through buying this week to legitimize the breakout and we have it this morning. The S&P 500 is making a new all-time high before the open.

Immediate follow through is very important when we have a breakout. It signals that buyers are interested and that the breakout was not a head fake. Tech stocks were a source of strength earlier in the year and they have been dormant the last few months. They have plenty of upside room and the market would have struggled to advance without them.

GDP, Durable Goods Orders and Initial Jobless Claims were all in line and we did not expect them to have much of an influence.

We have the technical confirmation we needed. You know from my comments that follow through this week was critical and we got it. Swing traders have starter longs on from last week and they can add today. I would not chase this gap up to a new all-time high on the open. We are likely to see a dip and that will give you a chance to monitor relative strength and to find the best prospects. Once support is established you can buy.

Day traders should not chase this gap up. What changed overnight? Was the news from Micron good enough to fuel a 50 point S&P 500 rally? Was it that unexpected? In my opinion, the answer is no. They posted a great number and semis have been dormant the last few months after a monster run earlier in the year. Now they are getting some love and this is sparking excitement across the entire tech sector. Don’t get me wrong, we need tech to lead the charge. Be patient and wait for a dip. I am expecting the high from last week (SPY $572.88) to hold. Any retracement or compression on the open will provide us with valuable time to find the best stocks and we won’t feel like we are chasing. If you see consecutive long red candles in the first 30 minutes (unlikely), you know to be very patient. That is a sign that there is selling pressure. If the dip is brief and shallow with most of the gap preserved, you can buy with confidence knowing that buyers are supporting the overnight move. If the market compresses for the first 45 minutes, that is also a bullish sign. Try as they might, sellers were not able to drive the market lower and buyers are aggressive.

Look at every day the last week on a five minute chart. Even the day of the new all-time high from last Thursday. In every single instance you had a dip and that provided you with an excellent entry point. Your prevailing thought is that you want to buy, but that you are going to get a dip. You are going to be patient and you are willing to let a Gap & Go run without you. I’ve told you many times that Gap & Go’s at a new all-time high are very rare. If that happens, I promise you there will be an opportunity to get long today. Don’t be FOMO Joe.

Support is at SPY $572.88.