The market started the day technically extended and the news flow was benign, but the bears were still unable to gain traction.
It isn't difficult to make a good case for some sort of pullback here, but the market is staying very sticky the upside. There seems to be more fear of being caught in a short squeeze or missing a runaway market than there is about any sort of rollover.
As I've suggested lately, I believe that the market dynamics create steadily upside pressure, especially when there are so many market players who want and need a pullback. Fading the faders is the strategy that is working, but it can shift very quickly and cause some surprises if you get too comfortable.
Alcoa (AA) kicked off the earnings season with its typical miss. The only reason this stock receives any attention is because it's first to report. If it reported a week later, it would largely be ignored.
We also have news of Slovakia rejecting the European Financial Stability Facility (EFSF) deal in Europe and that is causing some minor selling after hours. This is probably a very minor roadblock, but it will draw out a painful situation even longer. Ironically, the hope that some sort of European rescue deal will get done sooner or later is providing much of the underlying market support.
We end the day in much the same position we started. We are still extended and still bumping into overhead resistance, but stubborn underlying support and a tendency toward short squeezes makes the bears uncomfortable. It remains a challenging trading environment, but with earnings reports starting to roll out, conditions should change soon.
Have a good evening. I'll see you tomorrow.