The dip-buyers foiled the bears once again as they jumped on a gap-down open. The main culprit for the weakness was a stronger dollar, but somewhat surprisingly, the market was willing to shrug it off and held up fairly well. We had a little dip in the final minutes, but overall it was flat action on slightly negative breadth.
Oil led while other commodity plays like steel and coal were weaker. Banks and chips were fairly flat, but the hot money is still chasing names like NFLX, CMG, PCLN and GOOG.
The biggest positive this market has going for it is that it refuses to go down. The uptrend is still well entrenched, the dip-buyers are providing support, and there is no follow-through when we do weaken.
The biggest negative we have is that momentum has slowed lately. We haven't made any real progress for about two weeks now. We aren't falling, but we are using up a lot of buying power to run in place. What is really helping is that we continue to have some good action in individual names due in part to earnings and due in part to stories like a possible NFLX combination with AAPL or RIMM on its new product to compete against iPad.
The dilemma is that while it is easy to make a negative macro call, there is still good action in individual stocks. Market players are still working to put money to work, and that is giving us some good upside trading if you selective.
We have a big supply of earnings reports hitting, which has also helped the bullish cause since earnings have tended to be quite good overall. The positive sentiment associated with earnings has offset some of the big-picture concerns, but after Thursday night, the earnings schedule slows down quite a bit.
The bulls are still doing a very good job of frustrating the bears, but you have to wonder if they are due to take a rest soon. The upside just isn't coming as quickly or as easily as it did a few weeks ago.