After a solid day of gains on Tuesday the market experienced some choppy consolidation in front of major earnings reports. Breadth was slightly negative and there was selling in the closing minutes, but that is being quickly forgotten as both Microsoft (MSFT) and Facebook (FB) put up solid reports.
There are quite a few other reports hitting as well. Tesla (TSLA) is attracting a disproportionate amount of attention and there are some very big reports pushing the Nasdaq 100 ETF (QQQ) up about 0.5% after the closing bell.
Both MSFT and FB are already technically extended, so it will be very interesting to see how willing market players are to chase those stocks. These are not easy entry points. Still, analysts are likely to have favorable comments Thursday morning and there will still be market players willing to pay up so that they don't' miss out.
The market is offering a difficult dilemma at this point. Momentum and news are good but the air is thin up here and it is tough to find lower risk entry points. While we want to respect the trend, do we really want to put more money to work in extended stocks gapping even higher? It is a matter of style but if you aren't a little concerned about chasing at this point then you aren't looking at how far stocks have come since Dec. 24.
We'll see how the mood is Thursday morning after Wednesday's late earnings news is digested. Tonight, though, Big Mo is having a party and there is little worry about excess.
Have a good evening. I'll see you in the morning.