Stock futures, for the first time this week, are higher heading into the opening bell.
Despite the morning weakness, this market continues to despise downside. Each attempt at a pull back this week has been met with a rapid price reversal, none bigger than the action we saw out of the gate yesterday.
Earnings this morning are helping to keep futures aloft. The rally started after the close yesterdays and gains have held into the morning with the prices at levels we haven't seen in almost 48 hours.
The Nasdaq, S&P500, and Dow Jones Industrials, despite the weaker tone this week, rest within striking range of new record highs.
The rejection of the downside action this week represents a market that is unwilling to retreat. We've seen this action before, most notably after a negative news event. And each of the dip recoveries have resulted in record highs. Will this weeks action conclude in a similar fashion? Or are these sharp morning declines a display of a market on the cusp of that long awaited correction?
On the shorter term I will be watching S&P500 futures. Absent a breakout of this downtrend, we could see prices continue to melt into next week.
This weeks repeated attempts at downside helped the $SPY trigger a momentum sell signal yesterday.
The previous signal was short lived, but the last 5+ years these signals have been fairly reliable at signalling at least a pause of the upward action. On the flip side, the momentum, buy signals have been spot on in the timing of market reversals in this bull market.
Tech and $QQQ continue to show positive momentum despite the recent minor decline.
There are still plenty of headlines, noise, to tune out. The market rests just a percentage point away from fresh lifetime highs. Earnings are strong. Interest rates remain low. And Central Bank policy around the globe remains accommodative.
The rapid price recovery after swift declines still exists. BTFD, buy the dip has been going on for over 7 years. This weeks action is just another exhibit that the dip buyers, whoever they are... remain at the ready. Of course one day... it could be tomorrow or 2025, those dip buyers will be gone, and perhaps the bull market along with it. But for now, the action this week continues to show a market that is not ready, willing,or able to correct to the downside.
See you in the chat room.