EmailYesterday's performance by the stock market looked pretty scripted. Act One brought a little dip. Act Two brought a rebound effort. The light trading volume was the equivalent of the intermission. And the final act featured a late, heroic run to the highs of the day that killed the bearish villains.
Afterwards, the players were congratulated for another spot-on performance that pushed the Dow to another record closing high and left the S&P 500 less than ten points away from establishing a new, record closing high itself.
When the curtain goes up today, Act One is expected to feature the same storyline. The S&P futures are trading 0.2% below fair value, suggesting stocks are poised for a little dip at the open. There is some potential, however, that the rest of the performance will be ad-libbed.
Foreign markets are mixed with most benchmarks moving less than 1.0% in either direction; there isn't any market-moving economic data; and corporate news is limited mostly to company-specific headlines like Costco (COST) beating the Capital IQ consensus estimate by five cents and YUM Brands (YUM) reporting some encouraging same-store sales growth in China for the month of February.
Bonds have a gotten a bit of a buying boost after getting hit hard in recent weeks. The same can be said for gold and oil prices, which are up 1.1% and 0.3% in early action.
The potential to go off script today will hinge on whether the dip is bought. In recent weeks, the calls for an overdue correction/pullback have been building, yet stock prices have continually defied those expectations as participants have basked in the spotlight of central bank support and have bought every dip with aplomb.
The S&P 500 has gone up seven sessions in a row and has registered a loss in only two of the last twelve sessions.
The crowd will expect the dip to be bought. If it isn't, then there will be some real intrigue and possibly some concerted selling interest.
Frankly, there isn't a lot out there to suggest the script will be re-written in such dramatic fashion. Sometimes, though, there is indeed a surprise ending.
