The action looked a little nervous to start the day, but once again hopes that a fiscal stimulus deal might be passed helped to provide some support. This time the optimism had a better technical impact and took the indexes from red to green and resulted in a close near the highs of the day for the first time since Oct. 8.
Small caps exhibited good relative strength with a gain of 1.7%, which resulted in breadth around two-to-one positive. New 12-month highs remain at low levels, which is due to struggles in the big-cap technology leaders. The IBD 50 exchange-traded (FFTY) fund lost $0.44 today, which illustrates how money was not willing to chase the higher relative strength technology stocks. The FATMAAN names were mixed, as well.
It is somewhat puzzling that the market keeps rallying on stimulus hopes when it is quite clear that there are still some very significant hurdles, and if there is progress, it will probably take at least a weak to have the details hammered out. On the other hand, no one wants to be caught short when the news finally does hit.
I'm concerned that we are not going to see any strong trending action, while we wait for election clarity. There will be some movers on earnings, but it is going to be tough to pick stocks that don't have some clear catalyst in the near term.
Intel (INTC) earnings just hit, and the stock is trading down around 8%. The numbers look mostly in line, but obviously, expectations have not been met. Intel isn't the leader it once was, but it is an important stock to the market and we'll see if there is spillover there into other technology names.
Have a good evening. I'll see you tomorrow.