It was a solid session for the market, which is trying to shape up into a sensational week and for all the right reasons. Corporate earnings are delivering, and more importantly, guidance has been robust and confident. I’m not seeing a lot of CEOs quibble about trade speculation or other issues that have cast a cloud over the market.

• NASDAQ: +1.7%
• DJIA: +0.87%
• S&P: +1.10%
• RUT: +1.10%

Market breadth was impressive, especially the major shift in milestones.

New York Stock Exchange

• New Highs: 110
• New Lows: 39

NASDAQ

• New Highs: 113
• New Lows: 25

The stock market is reacting to the economy, and that’s the way it’s supposed to be. The stock of the day and perhaps the year is Netflix (NFLX), which continues to deliver. 

Technical Buy Signal

Don’t look now, but the Dow Jones Industrial Average is down only six percent from its all-time high. I always stress underlying fundamentals, but there is a role for technical analysis and I want to review it. 

Yesterday, the index triggered two major technical buy signals.

The index pierced and closed above its 50-day moving average.

The chart is in a cup-and-handle formation.

The only issue is the volume - which continues to be light, but momentum has shifted to the upside - and all you fence-sitters should pay attention.

Messages of the Market

Strong Consumer

The Consumer Discretionary Sector rocked, in part to Netflix, but also because of Amazon (AMZN), which rallied on word the Supreme Court is torn on the issue of internet sales taxes across state lines.  Conventional Wisdom suggests the court will hand online retailers a major victory. Watch brick-and- mortar names as they continue their stealth rally along with restaurant names.

Merger Mania

Technology soared with strong leadership from semiconductors, along with the growing scuttlebutt about possible consolidation in customer relationships and management space, lifting shares of Salesforce.com (CRM), and several of my favorites.  Other potential targets include Splunk Data (SPLK), Palo Alto Networks (PANW) and Tableau Software (DATA).

Oil Gusher

While crude has been consolidating its gains from last week, oil-related stocks act great, especially those with lots of exposure to the Permian and Eagle Ford basins. I continue to like Concho Resources (CXO) and Pioneer Natural Resources (PXD).

The Offense is Defensive Stocks

Unless you have issues with defense contractors on moral grounds, it’s nuts not to have some exposure.  In addition to increased domestic spending, the Trump administration is going to step up sales to American allies.

Marijuana Stocks Get High

Friday is 420, also known as “Weed Day,” but for GW Pharmaceuticals (GWPH), the party started yesterday with its shares up more than 11%.  The FDA internal review says the company’s medicine made without THC reduces seizures in children with severe forms of epilepsy, and there will be a public hearing on Thursday.

Mixed Results After the Close

International Business Machines (IBM) beat on revenue and earnings, but the stock is under pressure because analysts are not happy with the results of a key company initiative.

 Move over, truckers. It’s time for the rails to drive the market as industry leader CSX Corp (CSX) beat the Street by $0.12

There is so much going on. All I can say is at the very least; I hope you held during this wild ride. For those looking to beat the market, I hope some of you have nibbled. I’ll have a lot more information in my morning commentary at www.wstreet.com.

Today’s Session

All eyes are on the EIA petroleum inventories and, to a lesser degree, the Fed Beige Book.  This will be an interesting session to see if tech can rally without semiconductor stocks, which will open lower on the initial reaction to Lam Research (LRCX) earnings. 

IBM is weighing on the Dow, and it will be an anchor for the index. 

Interestingly, equity futures have been higher all morning long; although, fair value points to a flat open. The key today is for the bias to remain to the upside despite a couple big names being down a lot.