Sentiment Stays Bullish Ahead of FOMC Announcement

The market is higher again in early trading, following last night's State of the Union address by the President. Actually, I didn't really hear anything that was different that what we have heard before from the Administration, so I'm not sure how much weight I would put on last night's speech.

We got a solid housing report this morning, with new home sales spiking 17.5% in December, from 5.5% last month. That report likely boosted sentiment as much as anything else.

There was also another wave of earnings reports last night and this morning. Some of the positive reactions include JNPR, FTNT, and GILD, while BA saw a negative reactions in its stock.

The FOMC meets later today, but I think most investors are not expecting the message to change much. There is some debate about whether the Fed will complete its $600 billion asset purchase program, but I think this is a done deal.

Asian markets were mixed last night, with India and Australia closed. The dollar is flattish so far, while oil prices are up a bit to $86.30 and gold is lower again near $1331.

The 10-year yield is bouncing to 3.38%, within the range its been trading for the better part of the last six weeks. The VIX is down -4.5% today, back below the 17 level.

Trading comment: The S&P is back at new highs today, nearly touching the 1300 level. There is some data that shows the market sometimes tops coincident with the State of the Union Address, but that remains to be seen. The market bent a couple of times in the last few weeks, but sure hasn't broken. The stair-step market continues. I continue to be surprised by the lack of a bigger pullback, given how I think bullish sentiment has become stretched.