Market players have set aside fiscal cliff concerns this morning and are optimistic that the Fed may do something market-friendly tomorrow. Market players may be anxious to jump ahead of that news.
Breadth is very strong at about 3650 gainers to 1300 losers. Biotechnology, chips and oil are doing well while precious metals are the primary laggard. What is really helping the action today is better action in Apple (AAPL) and aggressive in buying in AIG (AIG) now that the government has dumped the last of its bailout stake.
The feeling I'm getting from this action is that market players are underinvested and are worried about being left behind. Although the market has been holding up well recently, there has been hesitancy to load up with the fiscal cliff looming. While the market has been anticipating a positive resolution, there hasn't been a rush to build long exposure. The action we are seeing today causes fear about underinvestment, and that is why there's a mad scramble this morning.
I'm one of those underinvested folks myself, and I have become even more underinvested as I've flipped movers into this strength. I'm long AAPL and AIG and I'm inclined to add to those positions, but I'd really like to find small-caps to buy aggressively so I'm staying selective.
Right now, the bulls are in control and that needs to be respected.