Consolidating Near New Highs

The S&P 500 rallied yesterday to make a new intraday high, but sold off late in the day.  This morning markets opened on a down note, but are hanging in there and consolidating near these recent highs.  The healthiest action would be if we saw some continued sideways consolidation before breaking out again to new highs.

In economic news, consumer confidence for February came in at 78.1, down from 79.4 last month.  Separately, the Case-Shiller Home Price index for December rose another 13.4% on top of the previous month's 13.7% gain.  This data lags a bit, but it does confirm the strength in home prices into the end of last year.

In corporate news, JPMorgan lowered its profit target and said the company plans to cut additional jobs in its mortgage division.  This news is weighing on bank stocks relative to other sectors.  

Asian markets were mixed overnight.  China was down -2.0% but Japan was higher by +1.4%.  Japan said the approval rating for the prime minister's cabinet improved to 52.9%.

Europe's markets are lower this morning.  Germany's GDP was unrevised for Q4 at 0.4%.

Oil prices are down slightly to a still high $101.50.  Gold prices are firm near $1339.  Gold is now trading comfortably above its downtrending 50-day average near $1306, and its 200-day average is turning upward sloping which is bullish.

The 10-year yield is lower to 2.71%.  And the volatility index is also down slightly near the 14.05 level.

Trading comment: This market still trades bullishly.  It doesn't take too much good news to move the market higher.  And pullbacks again so far this year are more short and shallow that deep and scary.  Folks are still calling for that elusive 10% correction at some point, but the key is from where.  It is very possible that the market moves to considerably higher levels before we see such a correction.  So we continue to focus on leading stocks and let them march on while the market stays in this benign environment.