The S&P was once again able to bounce back from a down open to finish in narrowly positive territory Wednesday. Weakness in foreign markets overnight weighed on futures, but strong earnings from the financial sector helped lead the bounce. At this point the market continues to rest and digest with no major catalysts in either direction ahead of options expiration this Friday.
Traders were looking to earnings this week to perhaps wake up the market a little bit, but the cross winds continue. The banks continue to do their part for the indices, and today was no exception. Goldman Sachs (GS) delivered a blockbuster report this morning, opened higher and rallied all day on its way to a 4.1% gain. JP Morgan's (JPM) report was more lukewarm and the stock opened lower but was able to rally into positive territory during the session. Bank of America (BAC) was also strong ahead of its earnings report tomorrow morning, posting a 2.0% gain.
Apple (AAPL) also showed signs of life today after looking out for the count on Monday and Tuesday. The stock posted two straight days of 3+% losses but got a boost after the close yesterday when well-respected technician Tom DeMark opined on Fast Money that the stock was a day or two away from a major bounce according to Elliot Wave Theory. AAPL opened higher and continued during the session, finishing with a 4.2% gain. It will be key to see what this move leads to. If AAPL can sustain a multi-day bounce, it could be the lift the market needs to break out of this range.
Facebook (FB) pulled back for the third straight day surrounding its surprise event yesterday. The company announced a new type of search, called Graph Search, based on your social network, and investors are not terribly enthused. The stock has seen an impressive run since mid-November, so a pullback is not altogether surprising.
Overall I think the enemy is overtrading right now. Be selective with your short-term trades, and if you are sitting in swing long trades right now there has so far not yet been a sell signal in the market, in my opinion. Over the last several years we have grown accustomed to a steady flow of high stakes headlines, and in the absence of hyperbole from the media it seems the market doesn't know what to do with itself. In time, though, I think it will be seen as a positive and money could flow back into equities more steadily.
*DISCLOSURES: Evan Lazarus has no positions