The market seems to be expecting friendly comments from Fed chief Janet Yellen this afternoon. That is probably not a bad speculation, as she is likely to temper some of the recent hawkishness and emphasize again that the Fed is "data dependent." This market has always preferred a dovish Fed to economic growth and that still seems to be the attitude.
There's strong market action this morning with oil leading the way and very solid breadth of better than 2-to-1 positive. There is a dip in biotechnology, but that is being shrugged off, and big-cap technology names are acting well. Some of my recent favorites include Acacia Communications (ACIA), Teck Resources (TCK), Evolent Health (EVH) and Five9 (FIVN).
I continue to embrace the thesis that the indices are going to break out to the upside soon. I have no idea if they will be able to build momentum beyond that, but I believe the psychology of this market favors new highs. Any bears trying to time a top are likely to be squeezed first.
I've often written that the market loves to love the Fed, and that dynamic is likely at work for Janet Yellen's speech this afternoon. The bears keep thinking they are finally going to have a negative catalyst, but there still are far too many underinvested bulls looking to put money to work.
