Momentum has slowed after the big move on Thursday but breadth is strong at around 4300 gainers to 2500 decliners, and the number of stocks at new 12-month highs is over 250. The indices have reversed after an intraday surge as some profit taking is kicking in but a rest after the move we have seen this week is not surprising.
Over the last few months we have had a number of weak closes on Fridays. Last Friday was an exception but it has been a tendency lately and may be self-fulfilling especially since things have become overbought.
A pullback here would not been a major worry. We need some consolidation after the recent run. It is likely that the bears are going to overact to any signs of weakness because they don't feel like this strength is justified. The rally this week caught many folks by surprise and they are still trying to reposition in case the bulls continue to charge higher next week.
I'm having some good luck with biotechnology names like Global Blood (GBT) and Arena (ARNA) today but we continue to see an inclination toward selling of good earnings news. Action Alerts PLUS holding NVIDA (NVDA) was another obvious example of that tendency but it bounced back well and stopped just short of turning positive on the day.
Some stocks that I see that are selling off on good earnings like Casa Systems CASA will be very good buys at some point but need to find support.
Overall it is still a positive day but the action is sloppy and there is risk of more profit taking into the close. Weakness today will not say anything meaningful about the overall market.