The positive market action that started on Tuesday when the banks kicked off earnings season is continuing. The China trade issue has been shoved aside, and the focus now is on earnings reports and positive technical action. Without the danger of major macro news headlines, market participants are free to focus on the merits of individual stocks once again.
Netflix (NFLX) saw its early strength sold, but still closed with a decent gain, while IBM (IBM) saw steady pressure and prevented the Dow Jones industrial average from participating. There isn't any major earnings reports after the close Thursday, but Intuitive Surgical (ISRG) is always a big mover and is breaking out over recent highs.
Next week will be very busy on the earnings front and current market conditions are good for positive responses. Expectations appear to be low and dip buyers active.
The most notable action Thursday was the out-performance by small caps. This is primarily a function of increased interest in small caps and more speculative names. It has helped to produce a positive shift in the character of the market action after the tedious focus on China trade.
The S&P 500 is a little technically extended here and could use some consolidation, but the setup for a run at the September highs is promising. It will only improve if there is some weakness in the next couple of days. Support levels are substantially lower, so there is room for some backing-and-filling.
There is no question that this is bullish price action. The bears' primary hope right now is that there will be a negative news event to upset the technical picture, but nothing seems to be on likely right now.
Have a good evening. I'll see you Friday.
