This market wants to go higher but it is doing so with no real reason, at least to me, other than it fell a lot and technically it got oversold.
What's remarkable to me is that we haven't had all that bad an earnings season and I could argue that manufacturing, which has been so weak, may have leveled off. Evidence: the bounce-back in the rails, Union Pacific (UNP) in particular, which is key for goods from Asia and Mexico. It also could mean that coal is now annualizing that last of the tough compares.
We know that oil is still the enemy and those Saudi comments were bearish, not bullish, even as desperate longs try to spin it another way.
When I look at what's working, I remain convinced that the health care bounce is suspect because of politics or doomed because of news like the further degradation of the hospital group. Wow, I think it is still not too late to sell them.
The only real positive I see is the resurrection of a stock like ADT (ADT), which seemed like a total lost cause. I would love to see some sign from China that there is a pulse post the new year, other than a tiny bump in the Baltic Freight Index.
All in all, this is a technical bounce based on little and we are using the strength to trim some positions for Action Alerts PLUS. (Be aware we have a conference call for all members coming up Thursday!)