For many traders, one of the more annoying aspects of this market for the past 10 years has been how often the central bankers have saved it. It often seems that they are more worried about the price of equities than how healthy it is to create mountains of cheap debt.
This morning we had a prime example of how this works when St. Louis Fed Head, James Bullard, commented that ""The idea that we need to go 100 basis points in 2018, that seems like a lot to me... Everything would have to go just right. The economy would have to surprise on the upside a bunch of times during the year. I'm not sure that's a good way to think about 2018."
That dovish talk reversed the selling that took place over night and has the indices in the green this morning. Quite often these Fed- induced reversals produce some sustained move but market players seem a bit more skeptical this time.
As I discussed in my opening post, the technical condition of the indices is supportive of a bearish view. This reversal today isn't enough to negate that setup. It is likely that the bears are still anxious to press their bets and would probably do so if we take out the opening lows.
Breadth is solid are around 3,900 gainers to 2,300 losers but we only have about 50 new 12-month highs, which is a function of the fact that the indices are still well off their January highs.
The biotechnology sector is leading on my screens with several names that I have often mentioned performing well. Sangamo Therapeutics (SGMO) , Iovance Biotherapeutics (IOVA) , Aimmune Therapeutics (AIMT) and Sarepta Therapeutics (SRPT) are leading. My Stock of the Week, Viking Therapeutics (VKTX) is working on new highs.
Despite the pockets of strength, I see some messy action and not much new as far as setups. I reduced positions Wednesday and don't see much I'm inclined to add today.