After a steep morning selloff the indices bounced back close to early highs, but breadth is still running close to 2 to 1 and there is some very mixed action. Facebook (FB) and Microsoft (MSFT) are trading near their lows of the day but are still up substantially. 3M (MMM) and Tesla (TSLA) are struggling to find some support, and UPS (UPS) is off its lows but isn't attracting much bottom fishing interest.
There is a very interesting report coming tonight form Amazon (AMZN) and it will be interesting to see how expectations have shifted following the strong reports from the other big cap technology names. Amazon has a history of surprising the bears that question its valuation but the stock is technically vulnerable for a 'sell the news' reaction.
We will have to see how the indices close but this less than stellar action on some good news could be an inflection point. That doesn't mean that we should expect a sudden collapse but if it is tough for stocks to gain traction when good news hits then what is going to happen when there isn't a couple of big blowout reports?
I'm maintaining a bullish bias but I've increased my vigilance and will not be forgiving of more weak price action. So far the dip buying has been impressive and that is what is preventing me from taking a negative view of the market.
After the action today the Amazon report is going to provide us with some very strong evidence of whether a short term top may be developing.