A stronger dollar presented an obstacle for the bulls, but for the second day in a row, they battled back and managed a strong finish. At midday, it looked like the buyers might stay on the sidelines, but the dip buyers just can't help themselves these days. They started to inch in, and before you know it, they had the Nasdaq back in the green. Strength in semiconductors and financials helped keep the mood from turning gloomy, but breadth was solidly negative, at almost two to one on the NYSE, due to weakness in retail and commodity names.
Buying each and every pullback has worked for quite some time. Market players who don't jump in quickly keep missing out, so they ensure that weakness doesn't last for long. One of these days, the dip buyers are going to find themselves trapped and will create some ugly downside when they try to escape, but today wasn't the day.
It is a good sign that the strength in the dollar isn't having more of an impact, but if it continues, you'll have to wonder how long we can hold up. It is also a good sign that expectations the Fed will roll out an incremental approach to QE II isn't causing disappointment, but it could spell trouble if the market doesn't have that as an upside driver.
We have a slew of earnings reports to digest once again. LVS is looking good on its report, but V is trading down slightly.