The DJIA suffered its longest losing streak of the year when it pulled back three days in a row to end the week but it looked more like some routine consolidation rather than a major change in the trend.
The indices hit lows around mid-day and then rallied most of the afternoon. There was a crazy last minute spike on some computerized trading that pushed the S&P 500 into green for the day. For the twelfth day in a row buying kicked in with about 45 minutes left in the trading day and sent the indices higher.
Breadth today was around 3,300 gainers to 3,800 losers but there were over 125 stocks making new 12-month highs. There were some good pockets of momentum and that helped to keep sentiment upbeat despite the selling in the indices early in the day.
With earnings season now down to mostly small caps the main focus of the market is on China trade, economic growth, central banks and some political issues. The potential for anything positive on China trade will prevent the bears from pressing too hard and signs of slowing economic growth will be offset by friendly central bankers.
Late today the Fed discussed using Quantitative Easing as a "regular" policy tool and not just for emergencies. The market always like anything that leads to more cheap money and that helped to keep the afternoon bounce going.
As I outlined earlier I'm expecting some trading range action in the near term as the market wrestles with headline news as well as some technical overhead. We saw today some indications of a favorable environment for stock picking and I'll be looking for that to continue next week.
The bears who are looking for the market to collapse now that the uptrend form the December 24 low has stalled are likely to be disappointed. However the newly minted bulls may find that the upside won't be as easy as it was in January.
Have a great weekend. I'll see you on Monday.