The S&P 500 has been making a methodical move on its way to retesting the all-time high (2872.87) it reached in January. There has been a bit of madness to the method for the bears, too, who have been unable to wrest control of this market away from the bulls.
That madness is wrapped up in the understanding that the information technology sector has reasserted its leadership weight at the same time the defensive-oriented health care and consumer staples sectors have started to pull more weight as market drivers. Additionally, the financial sector has also been a pocket of relative strength.
In short (no pun intended), the stock market has been resilient to headline hits on trade and geopolitical matters, having been underpinned by impressive earnings growth and a "next man up" leadership mentality. That is, when one leadership group goes down, there is another ready to take its place.
If it isn't technology, it's health care. If it isn't growth, it's value. If it isn't cyclical, it's counter-cyclical. Sometimes, it's all of the above.
And so the S&P 500 sits just 0.8% away from its all-time high and is seemingly on an inexorable path to testing that high.
At the moment, it appears as if the S&P 500 will take a step in a familiar direction when the opening bell rings. The S&P futures are up six points and are trading 0.2% above fair value, running in concert with the upside action in foreign markets, which featured a 2.7% increase in China's Shanghai Composite.
That positive bias has taken root despite the news that Chinese state media is making it known China won't back down from the U.S. in trade matters, that U.S. sanctions are going to make economic life difficult for Iran, and that Germany reported a 0.9% decline in industrial production and no month-over-month export growth in June.
In other words, it's mostly more of the same headline context beyond U.S. borders, and basically more of the same within the confines of the U.S. stock market.
The Nasdaq 100 futures are up 18 points and the Dow Jones Industrial Average futures are up 90 points in front of the earnings report from Walt Disney (DIS) following today's close.
There is a momentum factor involved, as the trend has certainly been a trader's friend since Apple's (AAPL) report, but predominately since market participants returned from the Fourth of July holiday.
Since July 3, the Dow Jones Industrial Average has surged 5.5%, the S&P 500 has increased 5.1%, and the Nasdaq Composite has increased 4.8%.
A case can be made that the stock market is due for a pullback, yet a case can also be made that the stock market has a basis for a breakout in the strong earnings growth.
Those thoughts can be maddening in their own right and might be the foundation perhaps for the rotation of capital within the stock market, as participants don't want to miss a breakout nor be vulnerable to outsized portfolio losses in the event of a setback.
Either way, there hasn't been much inclination of late to be out of the stock market altogether.