US stock futures point slightly higher once again Wednesday morning after making new multi-year highs yesterday. The jump in the S&P yesterday triggered the inverted head and shoulder pattern we have been highlighting, which would take the index to a measured move of 1410-1440. When approaching important news like a Fed rate decision (which is coming today at 12:30ET), markets often rest and make their move after, but this time around traders were too giddy to wait. Despite a wave of very negative headlines, the bull market remains alive and well. Yesterday's move showed tremendous breadth and momentum stocks did not really lead the charge.
DJIA INDEX 12,549.00 +31.00
S&P 500 1,345.10 +4.20
NASDAQ 100 2,398.75 +14.00
The fuel for this precipitous week-long bounce has been another impressive earnings season. Tech sector earnings have been especially impressive, with Apple Inc. (AAPL) among the giants reporting stellar quarters. Amazon.com, Inc. (AMZN) was the latest tech giant to report after the close yesterday. The e-commerce website missed significantly on its EPS number, but that miss was due to special spending to enter the cloud computing game, which holds major promise for the company. The rest of the report was strong, and investors, after initially selling AMZN stock off sharply, brought it all the way back. AMZN is basically flat this morning.
As I alluded to, momentum stocks took a little bit of a break and it was hard to fathom, at first glance, how the market was so strong yesterday. Chinese Internet stocks, which had been the darling of the part for the past few weeks, sold off hard as investors moved into safer, more value and dividend oriented investments. Both Sohu.com, Inc. (
SOHU) and SINA Corporation (
SINA) were down around 3% yesterday, and it will be important to see how they respond today. Even a market leader like Apple Inc. (
AAPL) was weak yesterday, and Apple strength is usually key to the market making new highs.