We didn't have particularly large gains today, but it was quite impressive how aggressively we bounced back. This morning, it looked like we were going to have a fairly aggressive sell-the-news reaction to earnings, but the dip buyers gained momentum as the day progressed and before we knew it, we had another positive day. Volume was quite heavy and breadth had reversed to 2-to-1 positive by the close. Retail and oil led the way, while drugs and gold were the laggards.
It is difficult to keep trying to convey how amazingly resilient this market has been. We have not had more than a half a day of aggressive selling in months. We had a little more volatility over the last week since the GS fraud charges hit, but the bears have not been able to dig their claws into this market for longer than a few hours.
AMZN earnings are out, and it doesn't look like a sufficient blow-out to keep it running. The stock is up dramatically and expectations were high, so a beat of 10% and so-so guidance isn't good enough. MSFT is the other big report tonight and it is down initially on the release.
This market has shrugged off all the negatives thrown at it for months now, but at some point, poor reactions to earnings reports will matter. However, given how this market keeps coming back, you have to be a least a little hesitant when it comes to trying to call a top.
Like last night, we are seeing a good amount of selling as these earnings reports hit, but you can bet the dip buyers are going to be prowling around tomorrow morning. This is a market that hasn't seen a dip that it hasn't loved for over a year. Only a fool would keep on saying that this time it's different after being wrong the last 50 times they made such a prediction.....