"Stop being afraid of what could go wrong and focus on what could go right."
A poor response to earnings from Action Alerts PLUS charity portfolio holding Alphabet (GOOGL) had little impact on the market uptrend. It did help to produce some rotation out of technology and FAANG names and into financials, retails and oil, but the indices hit new all-time highs, breadth was very strong at better than two to one positive and more than 750 stocks made new 12-month highs. That is bull market action.
The obvious course of action is to stick with the trend. But the bears, who keep on trying to call a top, aren't about to give up. The market has ignored their concerns about valuations, the lack of progress of the Trump fiscal program and the endless bubble arguments.
Today the bears are going to be focused on the Fed's interest rated announcement as a potential catalyst. There was some negative market reaction recently as Fed members discussed the unwinding of its huge balance sheet. Bonds that mature are no longer going to be rolled over and the process of reducing years of accommodation will begin.
The Fed has been careful to tell the market that it is going to move very slowly and will keep a close eye on economic growth and inflation. There has been some softness lately that has tempered the level of hawkishness and that is part of the reason the indices are hitting new all-time highs.
The bears will be focused today on any discussion of the Fed balance sheet and will be looking for a "sell the news" reaction to the announcement today at 2pm ET, but the tendency of the market is to rally on the Fed. I've often written that the market loves to love the Fed, and there is no reason to think that tendency is about to reverse.
Earnings season has generally been quite good so far. The political drama in Washington is still being ignored and anxiety over being underinvested is keeping bids under the market. The bears still believe disaster is right around the corner, but the market doesn't seem very worried.
We have a slightly positive start to the day as the market is content with good earnings from such names as US Steel (X) , Texas Instruments (TXN) , iRobot (IRBT) , Advanced Micro (AMD) and Chipotle (CMG) .
You can make some fine arguments about why the trend should reverse, but the Fed announcement is not likely to be a major catalyst today.