It was another day of slowly grinding higher on lighter volume. Usually we have strong breadth to go along with that sort of action, and it was around 2 to 1 positive on the NYSE but just a bit better than even on the Nasdaq. All major sectors were positive, so I'm not sure what exactly was lagging.
I suspect part of the reason for the surge at the close was that market players are anticipating the typical strength on Monday, plus DJIA 11,000 was in the crosshairs and they were anxious to hit it. They did breach 11,000 for a few minutes but couldn't hold it into the close.
With earnings kicking off next week, we have a very interesting setup. We are technically extended and have not had a pullback of more than 1% in something like 45 sessions now, so you have to be thinking about a possible sell-the-news reaction, but the one thing we can say about this market is that it continues to act in unusual fashion. Nonetheless, the stage is set for some strong reactions to earnings.
When the market was grinding lower day after day a little over a year ago, I would often write that the market tends to wear you out rather than scare you out. I think that is exactly what is happening now, but only in the other direction.
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