The action in the indices was muted but breadth was quite strong with about 4,800 gainers to just 1,900 decliners. Big-cap Nasdaq names were the main source of strength with stocks such as Amazon (AMZN) , Micron Technology (MU) , Palo Alto Networks (PANW) and Baozun (BZUN) blasting to highs. There were more than 230 new 12-month highs, which illustrates the chasing that is now taking place.
On a technical basis, the S&P 500 is pausing right at its 50-day simple moving average around 2738. Since the market has already recouped the big drop -- and more - resulting from the tariff news the upside momentum in the indices is slowing but the buyers are gravitating toward some of the large-caps instead.
The way you perceive this market will depend quite a bit on style. If you prefer to buy strong momentum and don't mind extended stocks you are going to find some things you like. However, if you are looking for buys off support levels that aren't extended you will not find much at all. I am feeling a bit frustrated right now with my ability to find new merchandise and put cash to work.
The irony right now is that stocks keep rallying and on any news that suggests that tariffs may not be the negative that the market anticipated. Although the indices have already recovered all the recent losses and keep rallying further on new headlines, market players are conditioned to buy news without regard to the fact that it may already be fully discounted.
The bulls have the momentum, but overhead resistance lurks and there is some choppy action. While the list of new highs is making the optimists more optimistic, the market is more prone to sudden pullbacks lately so I'm not as blithely bullish as I have been previously.
Have a good evening. I'll see you tomorrow.
