One of the most fascinating things about the market is how news and price action often aligns. There was almost no one that didn't think that the market action was frothy and downright absurd on Thursday when stocks like Apple (AAPL) and Advanced Micro Devices (AMD) ramped even higher after a big run.
It made perfect sense that we were due for some corrective action and that is when the news hit that the U.S. military had killed a high ranking Iran official. It was an extremely convenient reason for a pullback at the perfect time.
Of course dips created in this way almost always generate immediate dip buying and today was no exception. Buyers pounced on the weak open and have the indices well off their early lows. Breadth is still poor with about 2200 gainers to 5000 decliners but the point losses are fairly mild.
In addition to the Iran news, the December ISM Manufacturing Index came in at 47.2 versus estimates of 49. That is the weakest report since June of 2009. There hasn't been any major reaction to the ISM report so far but it does provide the bears with some ammunition and is another good excuse for some corrective action.
Overall the market is handling these excuses for selling in a very favorable way. There clearly are buyers lurking about looking to catch some weakness. I'm one of them. I added InMode (INMD) on the weak open and a couple others.
No one can seriously dispute that the market badly needs some corrective action in order to be technically healthy going into fourth quarter earnings season. The strong bid under the action indicates that sentiment remains quite positive and that is going to take much more negative price action in order to cause a rush for the exits.
The S&P 500 is hitting intraday highs as I write and doesn't seem to care very much at all about either Iran or the ISM numbers. Those that keep hoping for pullbacks to buy will be frustrated but this continues to be a very healthy market that can handle whatever is thrown at it right now.
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