In a market that wasn't so technically extended, very good earnings news from Microsoft (MSFT) , Amazon (AMZN) , Lam Research (LRCX) and several others would have all the indices trading sharply higher, but market conditions are not conducive to chasing at this point and a surprisingly weak earnings report from 3M (MMM) has given the bears ammunition. The bears have been growling about slowing economic growth for a while and 3M, which sells a broad array of industrial and consumer goods, is giving them what they wanted.
What is most worrisome about the action so far is how the broad market simply doesn't care about the good earnings. Breadth is running about 1850 gainers to 4700 decliners. That is all you need to know to understand that this is a very narrow rally. The fact that the strong stocks are mainly index heavy weights is what is preventing an absolute rout of the indices at this point.
Gold has been a laggard for a while but seems to be finding some support recently. Currencies tend to drive gold more than any other factor and I have typically found that traditional technical analysis doesn't work that well with the group in the short term. Nonetheless I am seeing some signs of interest in the group and am inclined to start position.
My two favorite gold miners are Kirkland Lake Gold (KL) and Agnico Eagle Mines (AEM) . Both companies have some of the best EPS growth in the sector and KL has demonstrated good relative strength for a while. I'll be looking to add to both.
The S&P 500 (SPY) has rolled over again as I write and this action is looking poor. A market that can't rally on great news is one that requires a high level of caution.