For the fifth day, the big question is whether the market is just consolidating gains or this weaker action is an indication that a top is beginning to form.
The bears have been growing much louder lately. They are convinced a variety of factors are going to combine to create the top they have been predicting for eight years. The strong ADP jobs report has caused interest rates to move into the forefront, and with the Fed announcement next week there is going to be intense scrutiny of the market reaction.
Since the election, the Fed, and central banks in general, have taken a backseat to the surge in optimism caused by hopes for Trump's tax and fiscal policies. Things have progressed to the point where generalities are growing old and Congress needs to start moving forward, but for now the optimism, which is reflected in the jobs data, is keeping strong bids under this market.
The dip buyers are making some efforts today and, unlike the last few days, the action in individual stocks is better than the indices. Breadth is still negative but there is stronger speculative action in places and that helps the tone of trading quite a bit.
Global Blood (GBT) , which has been a key holding of Sharkbiotech.com for a while and one of my top picks for 2017, is surging on talk that it has been approached by Novo Nordisk (NVO) . I feel there is still upside here and am not selling into the strength.
The S&P 500 is back up to the morning highs and we are seeing the strong afternoon phenomena occur again. If you are looking for an indication that the market may be turning, you have to watch the way it closes. That is going to be tipoff that the market is undergoing a change in character.
The price action still supports a bullish bias. The anticipatory bears may have arguments and logic on their side, but the bulls have technicals and price action, and at the end of the day, that is what pays the bills.