Although the S&P 500 and the DJIA are solidly in the green this morning, it is a very tricky day of trading. The strength was primarily the function of positive economic news out of China, a big jump in Disney (DIS) on its new streaming product, and a strong earnings report from JP Morgan Chase (JPM) .
The initial excitement over these events have cooled quickly and the S&P 500 took out its early lows and is now trying to find support. Very few names are trading at their highs of the day but breadth is still running around 4300 gainers to 2600 decliners. There are over 275 names hitting new 12-month highs which tells us there is some healthy pockets of strength.
Wells Fargo (WFC) , which reported this morning, guided down interest income, which caused the stock to reverse after early positive action but the financial sector is still doing well.
Disney is well off its early highs but this a classic multi-year breakout and will attract momentum and breakout buyers as it develops further.
There is weakness in biotechnology again and the big cap momentum names are doing little. The IBD 50 Fund ETF (FFTY) is trading flat and Apple (AAPL) has reversed into the red and is putting some pressure on the indices.
Overall it is a tricky trading environment with some big cap names driving the indices into the green but with no intraday follow-through so far. There isn't much going on as far as stock picking and there isn't any strong momentum themes. It is a very tough market to chase but there isn't much developing for dip buyers so far.
It is one of those markets that look very good from the outside but much more difficult to trade once you dig in. The trend is still very positive and eventually that should lead to some better entries. I'm doing little.