While simplistic, following recent patterns *sometimes* works. In this case during the second half of 2013 whenever we have a modest correction of 3-5%, the ensuing rally has been dramatic and violent to the upside, with the majority of the move coming in the first 12-14 sessions. We appear to be in another such pattern. Yesterday we noted IBM revenue missed and that generally leads to some downside since the DJIA is so reliant on the stock. We mentioned that if the market opened down it would be interesting to note how quickly the buyers showed up. Well we got our answer today - very quickly! You can see that from the intraday chart below - the red line is where yesterday's close was. Buyers came in early and continued lifting the index all day. The S&P 500 gained 0.67% and the NASDAQ 0.62%.
Frankly with the can kicked down the road til January 15th in this budget deal, and the market not really caring much about earnings, it seems all systems are go until the turn of the year in the market. When you see a company like IBM not affect the market at all you know it is a bullish attitude.
No changes to the S&P 500 and NASDAQ charts, they are in breakout mode....
Our NYSE McClellen Oscillator is soon to be in overbought condition - a positive reading is good, but we generally want to see it steady in the +10 to +40 area. If it gets over +50 tomorrow we will be prone for some rest. That does not necessarily mean a pullback, but it could mean a few days of sideways action / rest.
We have not mentioned oil of late but it is interesting to note how since the Syria situation it has been in a significant downtrend. Of course this type of pattern should be very familiar as when it breaks to the upside it can lead to powerful moves.
Also interesting today were the gold miners - this is the ETF for the group. While a bad technical setup it was indicative of the day in the market where quite a few laggards actually were leading today.
Speaking of laggards the homebuilders had a strong day. This group has been weak for a while now as the assumption was there would be some Federal Reserve tightening coming. But with Janet Yellen coming into power early next year and with the folks in D.C. doing nothing but kicking the can, quantitative easing seems a sure thing for a much longer time now which should help interest rate sensitive sectors like housing.
After the bell, Google (GOOG) reported earnings and the market was very happy with the company. Google has had a recent history of hit or miss so perhaps with this quarter the company will be able to regain an uptrend over the next few months. The stock is up 8% in after hours to the $960s... aka ALL TIME highs.
Google Inc's quarterly results beat Wall Street's expectations as the Internet search giant expanded its mobile business while keeping ad-rate slides in check, offsetting deepening losses from Motorola. The company reported a 23 percent rise in revenue from its Internet business, excluding fees paid to partners, of $10.8 billion in the third quarter. "They were able to grow their revenue pretty substantially, particularly in their own websites, in spite of having lower overall ad prices," said JMP Securities analyst Ronald Josey. Google's business, like rivals Facebook Inc and Yahoo Inc, has come under pressure as more consumers access its online services on mobile devices such as smartphones and tablets, where advertising rates are lower than on PCs. Paid clicks increased 26 percent year-on-year during the three months ended September 30, while the average cost-per-click - the price that marketers pay Google when consumers click on their ads - decreased 8 percent.