One thing that has been missing from this market for a while is downside momentum. When there is a good excuse for selling like a missile attack by Iran or a deadly virus the indexes pull back, but the buyers can hardly wait to jump in. There is no sustained fear or worry. No one seems to be frightened by the prospect that the market may go without bids.
There was another example Thursday as some early concern about the virus in China caused some selling pressure, but it relented at mid-day and the indexes trended up all afternoon and closed near the highs of the day, with a minor gain in the S&P 500. Breadth was close to flat and there were over 400 stocks hitting new 12-month highs.
To further frustrate the market skeptics, Intel (INTC) put up a very strong report and guidance after the close. The stock has made a big run into the news, but the numbers were stellar, and it is trading up over 7% after the news.
Intel has had a history as a market bellwether. That has changed some in recent years, but in the past, its report has marked major shifts in the market -- both up and down. I recall very well how its report back in 2009 was one of the major catalysts for the market recovery.
We will see what Intel does, but it is tough to be too bearish about the overall market with a report that strong. It is a cyclical stock and doesn't always receive a great multiple, but it still looks fairly cheap with a trailing price-to-earnings of just 13.
Quite a few market players, including bulls, are still hoping to see more corrective action, but the fact that so many want to buy weakness is preventing it from happening.
The good news is that while the indexes are quite stretched to the upside, there are still quite a few good charts that are not extended. That is where the money is and that will be most my focus will be.
Have a good evening. I'll see you tomorrow.