Exercise Patience

 | Jan 20, 2012 | 10:38 AM EST
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Microsoft (MSFT) and IBM (IBM) are near their highs following their earnings reports but it isn't enough to combat the "sell the news" inclination. The dip-buyers bought the initial weakness, but the market quickly turned back and the SPDR S&P 500 SPY took out the opening low. That is a technical negative, but since the dip-buyers have had so much success recently, they are unlikely to give in easily.

Breadth is flat and we are seeing some minor strength in financials, while retail and coal lag. Overall, it is very mixed trading. I'm seeing mostly random action and no significant pockets of momentum in either direction.

As long as MSFT, IBM and Intel (INTC) hold up reasonably well, it is going to be tough for the bears to dig their claws in to this market. But if they threaten their lows, watch for the shorts to become more aggressive. The earnings news from these stocks was pretty tepid overall but the market apparently had low expectations, which is a bit surprising given how strong the action has been for a month now.

I have little going on right now and am staying patient and selective while I wait for opportunities to develop. So far I'm just not seeing enough movement to entice me.



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