Market Montage

We are currently in one of those teflon markets where nothing affects it.  Thus far (very early in the season) earning reports are beating expectations by the lowest % since the recession 'ended'.  Usually that would be a bad thing.  But right now the market could care less – any piece of good news is enough to buy and crowd out the noise from the misses.

If you are keeping track at home, we are on pace for a 50%+ type of gain this year.  And it could be the first year on record with no weekly losses. …

More on this topic that we've been circling around a lot of late – that of automation and the rise of the robot class.  (hopefully a "people" that the Supreme Court can bless in time so they too, can contribute to SuperPACs)  Ironically I watched an episode of the Twilight Zone this past weekend entitled 'The Brain Center at Mr. Whipple's" which actually was right up this alley. …

More signs for contrarians to take note of… of course sentiment measures are not precise in any way, but the short interest measure is something I'd definitely be aware of.  This run up has been on vapor volume – something we have become used to in the past 3 years (in the past we celebrated moves higher with expansion of volume…. now we have a new era, where volume apparently no longer matters).

• January is shaping up to be slowest month for US stock exchanges since, well, December, which ranked as the quietest month for buying and selling US equities in four years.

Anyhow the thesis is much of the rally thus far has been short covering but not "real buying" as there is no volume… I'd argue that to a point because much of the move from early 2009 has been on "no real buying" on that count (lack of volume).   …

Stocks continued their very slow grind upward Tuesday, although the major indexes were mixed with Apple weakness once more pressuring the NASDAQ. The S&P 500 gained 0.16% while the NASDAQ fell 0.17%. News flow continues to be nearly non-existent this week, but tomorrow's January retail sales should help provide some near term direction.

The S&P 500 has held the mini breakout of the previous two week range – the past two sessions have seen little giveback.

NASDAQ continues to play with those fall 2012 highs and thus far has been rejected. This is the third session the index has been pushed back by that resistance.

Specific to Apple (AAPL), the CEO spoke at an investor conference and it was expected there would be some news on its cash hoard; when nothing of note was announced the stock rolled over. Recall the stock broke over the $466 level to make a run up, so for the stock to see any form of bottom this breakout level needs to hold – the stock finished just above it today. Longer term it remains a very broken chart.

While the type of stocks advancing Monday was more defensive, the market was led by more offensive type sectors Tuesday. One sector that had been correction for a few weeks but woke up with vigor today was housing.

Financials continue their very impressive 2013 as the sector runs from one bull flag to another.  This has been the leading sector of the 2013 run and will be a sector to watch for a roll over ahead of any serious correction in the markets.

On the negative side we have Facebook (FB) which post earnings has been in a selloff. The chart had formed a "bear flag" the past week (opposite of the bull flag we see in charts like the SPDR Financials above) and broke out of it to the downside below.

Upscale retailer Michael Kors (KORS) was a star of the day. As the chart below shows it broke out of a sloppy "CANSLIN cup and handles" type of formation in the past week, and today exploded upward on earnings:

• Revenue rose 70 percent in the three months ended Dec. 29, fueled by the company’s so-called jet-set line, which includes handbags, wallets and watches, according to a statement today. Fiscal 2013 sales will jump 62 percent, the company said. Profit excluding certain items will be as much as $1.82 a share in fiscal 2013, compared with a previous estimate of as much as $1.50, according to the statement. Analysts estimated $1.57 a share, according to the average of 14 projections.