We had a euphoric open as Action Alerts PLUS charity portfolio Apple (AAPL) is being aggressively chased following its earnings report. Apple has the highest weighting of any stock in the major indices and that obviously has an impact on sentiment. The S&P500 is making new intraday lows as I write, although Apple is still trading strongly.
Under the surface, the action is a little more tentative. Breadth is two-to-one but the follow-through in individual stocks is mixed. Biotechnology, which led the market higher yesterday, is trading around flat, despite strength in heavyweights Biogen (BIIB) and Amgen (AMGN) .
There has been talk about how volatility is sure to pick up as the market reacts to Donald Trump and his policies. We are seeing a little more movement the last few days, but the bulls are showing good resilience.
Don't forget we have the Fed interest rated decision coming up at 2 pm ET. I can't recall the last time that there has been so little attention paid to a Fed meeting. The Fed simply isn't being viewed as a market catalyst at this time.
It is widely anticipated that the Fed will set tight as it waits to see what impact the new Administration will have on fiscal policy. In addition, Janet Yellen's future isn't clear. There is the possibility that Donald Trump may make a change, even though her term is not up for a while.
I am not expecting any major movement on the Fed, but it is always a convenient explanation for what does happen. The indices continue to sink as I write. Apple is doing all the heavy lifting, but it isn't helping the broader market all that much.
I've been a net seller and am doing some flipping simply because I have some decent gains to protect. The intraday reversal from the opening highs suggests caution.