With Q1 earnings largely behind us, the market volatility has fallen off a cliff. Last Thursday (May 14), the S&P put up a big 1.1% rally. Then the range on the S&P on Friday was just 0.3%, and Monday's range was 0.5%. Today's range is again only 0.3%. The current volatility is a huge drop off from the past 100 days average range of around 1.0%. You could interpret this in a bearish light, calling it a stalled rally. But I think this low volatility is bullish, and I believe the market goes higher from here. My favorite sectors are health care and tech. Volatility has shown up in the bond market. Bonds traded heavy into the refunding and posted a bit of a rally subsequent to the 10 year and 30 year auctions. But the bond weakness has returned, and the 10 year is now below the auction stop level. I don't like bonds here, but the market might have a relief rally post-FOMC minutes tomorrow which will probably be a selling opportunity. I believe the Fed is firmly on the path toward tightening, and the housing market would have to show significant weakness before the Fed backs away from this tightening bias.