The indices have been in a trading range since gapping down back on March 21. The action has been improving the last few days, but "Big Mo" finally returned today as the FANG stocks and a variety of other momentum plays lit it up after the strong report from Netflix (NFLX) .
What was most impressive about the NFLX action was that there were buyers willing to chase it higher even though expectations were already very high. This was more a case of fear of being left out as momentum returns, rather than any real focus on valuations.
Goldman Sachs (GS) and other key financials have had the exact opposite reaction to earnings. Expectations weren't that bad, but beating them solidly still wasn't enough. This was the worst group in the market Tuesday as money rotated into the high momentum stuff that has been languishing for weeks.
It wasn't just the FAANG names that came to life. Buyers pounced on secondary names I've been tracking for a while such as PagSeguro Digital (PAGS) , Baozun (BZUN) and Casa Systems (CASA) . In addition, biotechnology sprung to life and there was some big movers in that group off recent support levels.
The good news about Big Mo is that he usually sticks around for a while. He gets the party rolling and there are always plenty of folks that arrive a little late. Those that missed the first move usually hang around and see if they can find some entries on pullback. The dip buyers will be much more alert and aggressive now as well.
Earnings continue to roll in with serial disappointer IBM (IBM) the main story tonight. However, after the good reaction to NFLX you can bet that there is going to be some interest in chasing other good reports down the road.
Have a good evening. I'll see you tomorrow.