Good markets tend to open weak and close strong. That has been the case for the last couple of weeks, with the Nasdaq closing near the highs for 11 of the last 12 days. There are some computer games in the last few minutes of trading, but the buy programs have been quite consistent lately with the afternoon ramps.
The natural reaction is to believe it can't last, but it has already persisted longer than many believe is reasonable. It is why so many astute traders tend to stick with momentum rather than fight it. There are always great bearish arguments, but the key is timing and right now the bearish timing is not working.
Alphabet (GOOGL) is out with what looks like solid earnings and is seeing a "sell the news" reaction. That isn't too surprising given the run-up into the report. The question now is where it will find support. Typically, the dip buyers have done well with these sorts of situations, but we'll see how this plays out. The reaction to GOOGL is going to be very important for the market as earnings season heats up, as it gives us some feel for the inclination of market players to lock in gains at this point.
As I discussed earlier, this is a market for stock picking rather than market-direction calls. Lumetron (LITE) , which I named my stock of the week prior to the open, is a very good illustration of how pockets of momentum are working. The reaction to stocks like GOOGL could dampen that, but trying to predict tops sure isn't working.
The Nasdaq 100 ETF (QQQ) is giving up most of its afternoon gains on the reaction to GOOGL but I suspect the dip buyers will be lurking.
Have a good evening. I'll see you tomorrow.