The market saw some minor selling pressure on Thursday after a major revision in the way that the impact of the coronavirus in China was calculated. Buyers immediately bought the morning weakness and provided strong support for the rest of the day.
There were another 5,090 cases in China overnight but the market continues to be remarkably unconcerned about the issue. All the major U.S. airlines have suspended service there through April and stories of the economic impact continue to build but there still is no significant market impact.
The market's lack of reaction to the economic impact of the coronavirus is largely due to the price action of the indices. The strength of the indices sends the message that there isn't any real worry and market players are more prone to believe the green on their screens than the arguments made by the press which has lost much credibility in the age of 'fake news'.
This morning attention is shifting to some very strong earnings reports and to Nvidia (NVDA) in particular which has a slew of target increases after issuing robust guidance.
At some point, this market is going to suffer from some selling pressure and you don't need to be Carnac the Magnificent to predict what the headlines are going to be: "Coronavirus Causes Economic Damage". It will happen at some point but it is quite evident that no one can time it very well.
The only logical way to navigate this market right now is to stay intently focused on the price action. That is the only way to have any chance of timing a turn with any precision. It is even better to focus on individual stocks and not worry too much about the indices.
So far in 2020 there has been only one Friday on which the S&P 500 closed with a gain. The market is closed on Monday for Presidents Day, and the conventional wisdom is that there may be an inclination to reduce some market exposure to avoid the risk of bad news over the three day period.
Maybe that works but this market has made it quite clear that there simply is not much fear of risk. The big fear is that this market is never going to stop trending upward and that it will be impossible to keep pace.
We have a positive start to the day with the semiconductor group, (SMH) , driving the action.