Markets Face Heavy News Flow in Next 48 Hours

In addition to the State of the Union address and the Fed interest rate decision, companies representing about 25% of the Nasdaq 100's market cap will report results in the next two days.

It turns out that the market is not 'different this time.' It does not go straight up forever and there are occasional selloffs of some magnitude. The pullback today was the biggest one for the DJIA since May 2017. Breadth was abysmal with just 1350 gainers to 5500 decliners. New 12-month lows surpassed new 12-month highs by a score of 250 to 90.

The FAANG names -- Facebook (FB) , Amazon (AMZN) , Apple (AAPL) , Netflix (NFLX) and Alphabet (GOOGL)  -- held up relative well with Amazon  in particular doing some heavy lifting. But there were few safe havens today. A couple biotechnology names like Madrigal (MDGL) and Iovance (IOVA) held up, and Immersion (IMMR) , which I discussed on Monday, made a strong move. But those where the exceptions in a sea of red.

The big question now is whether this is the start of a major top or just some healthy corrective action that will relieve some of the extended market conditions and set us up for more upside. We will have a slew of news events in the next 48 hours to provide some excuses for buys and sells.

The State of the Union address is tonight followed by the FOMC interest rate decision  tomorrow at 2 p.m. ET.

In addition, roughly 25% of the market cap of the Nasdaq 100 will report earnings in the next 48 hours. All the major names in that indices are clustered in a very short span of time for the first time that I can ever recall.

The inclination of the market is to come back very fast from these pullbacks. We have not had a sustained decline since January 2016. Some might argue that we are due for something severe, but that isn't a very good basis for a market opinion. The price action still has not been bad enough for long enough to create a major change in character. The uptrend is under the pressure but a downtrend has yet to develop.

I am proceeding with the view that this is a buyable dip, but I'm prepared to be wrong and will take my stops should that prove to be the case. It should be a very active market for the next 48 hours so buckle up and enjoy the ride.

Have a good evening. I'll see you tomorrow.

At the time of publication, Rev Shark had no position in any stocks mentioned.

At the time of publication, Action Alerts PLUS, which Jim Cramer co-manages as a charitable trust, was long FB, AAPL and GOOGL.