For the second straight day the market was unexcited about some great earnings report but the soft open brought in dip buyers who pushed it back up.
While the bears had additional ammunition today with the Bank of Japan not doing as much stimulus as hoped and a weaker-than-expected second-quarter GDP reading, the bad news seems to trigger the buy algorithms.
This may be due in part to the old "bad news is good because it will keep rates low" thinking but I believe it's mostly because of computer programming that has found that buying bad-news dips is consistently a winner.
It is patterns, rather than news, that drives the markets.
Breadth is largely flat but the big-cap technology names -- Alphabet (GOOGL) , Amazon (AMZN) , Tesla (TSLA) , etc. -- are leading. We also have relative strength in gold, silver and metals. Names I've mentioned such as Teck Resources (TCK) , Richmont Mines (RIC) , Silver Wheaton (SLW) , AngloGold Ashanti (AU) and DRDGOLD (DRD) are being chased to new highs.
We also have some good examples of why trend-following can be such a good approach as Acacia Communications (ACIA) and Yirendai (YRD) continue to run straight up.
One new buy on my radar today is Nektar Therapeutics (NKTR) and I'd like to add some precious metal names if I can find entry points.
The market is still firmly within the recent trading range but it is trying to test key overhead resistance in the S&P 500 around 2175. I'm not sure the bulls have the juice to do it on a summer Friday but they have had the edge throughout this trading range and continue to produce a positive tone.
