The market has stopped gyrating. This is the third day of it not doing anything, and I think that's actually terrific for the bulls.
If you look at the charts, they are a lot like the chart of Northrop Grumman (NOC), which Bob Lang wrote up for last night's "Off the Charts" segment on Mad Money. They are extended and pulled away from support even as there is no resistance. What needs to happen is for that support line to come up, and I think that's precisely what is happening here.
So many stocks have to do some digesting. These banks have been so strong they need to take a break. But the kind of break they are taking post-earnings per share is very different from the last couple of years. Before they would give up huge chunks of their gains. How many times did we see JPMorgan Chase (JPM) go up after the quarter and then get hammered? How many times have we seen Wells Fargo (WFC) get blasted and then stay blasted after a quarter?
Now they are hanging around at higher levels.
We are seeing this kind of consolidation in many stocks that have just reported numbers the market liked: Honeywell (HON), Schlumberger (SLB), Johnson & Johnson (JNJ), UnitedHealth (UNH) and Chipotle (CMG).
All healthy.
Bulls need to mark time.
That's precisely what's happening.
