The action today felt as though market players were caught by surprise. No one really expected the market to do much on the State of the Union address, so when we gapped up to start the day, it was quickly sold, but the bulls found their footing and caught the overanxious bears and underinvested bulls by surprise. What was particularly surprising was that the charge was led by small-caps initially, but then oil and commodities took over and really caught fire.
The FOMC interest rate decision was greeted with a yawn. There were a few language changes in the policy statement but nothing to spook the market or change the view that the Fed will keep on running its dollar printing press.
We ended up closing slightly soft, but breadth was very strong at better than 2 to 1 positive, and volume picked up a little, giving us a technical accumulation day. Unfortunately, the DJIA failed to close over 12,000, so we will continue to hear about that irrelevancy from the geniuses on TV who seem obsessed with it.
The big question now is whether we are right back to where we were eight trading days ago, when we were going straight up without a pause. Is the never-ending uptrend back on? The indices certainly aren't acting like there is anything to worry about, but quite a few stocks suffered some damage in the last week, and you have to wonder if they can just shake it off and act like nothing happened.
Once again, the market has done a superb job of beating up any bears who thought that we could actually see some sort of downtrend. Conditions were quite good for more aggressive selling, but just when we looked ready to crack, we turned back up and used the shorts and underinvested bulls for jet fuel.
Earnings reports after the close are coming in quite good so far, and that is giving us an additional boost. Don't forget that we have AMZN and MSFT tomorrow night, which will be market movers.