The good news is that the bears were unable to build further downside momentum after a poor response to earnings from Amazon (AMZN) . The bad news is that the market showed few signs of life and there was little urgency to buy weakness.
A late buy program helped the indices to close near the highs of the day but breadth was negative and the number of stocks hitting new 12-month highs drooped sharply to around 175. The bulls were pleased that there wasn't any immediate downside follow through but there is no reason to believe that this was another one-and-done correction.
Earnings season continues next week as more secondary names report, but after the reactions we have seen to Facebook (FB) , Amazon AMZN, Alphabet (GOOG) and a number of semiconductor stocks it is pretty clear that there is a greater danger of 'sell the news' reactions to earnings than there has been in the past.
The market continues to be unconcerned about news like the failure to revoke Obamacare and the missile testing in Korea, but there are plenty of excuses to be used for more selling. This market has been uncorrelated to news events and it will be very tricky if that shifts.
I'm not at all confident that the corrective action we experienced on Thursday is over and am in no hurry to put a lot of money to work. There are opportunities developing but they have the potential to be even better opportunities.
Have a great weekend and do something fun. I'll see you on Monday.