Stocks Pause For Second Day

The markets are slightly lower this morning.  Yesterday stocks finished slightly lower also, but after such a big rally one might expect to see a larger pullback or more profit taking ensue.  But this has not been the case for months now.  It's still early today, but the odds favor more of the same.

There is no economic news of note.  There have been a handful of earnings reports.  Stocks rising on earnings include AZO, DKS, HD, and SKS.  Two stocks lower after reporting are URBN, and BBY.

In other corporate news, JPMorgan stock is leading the financials today after the vote to split the Chairman and CEO role for Jamie Dimon has been voted down.  Dimon threatened to leave the company if the Chairman role was taken away from him.

Also, Apple's CEO is testifying before Congress about its tax policies and international tax shelters.  As a shareholder, I want the CEO to minimize taxes.  If Congress is opposed to it, they should either close any loopholes or revise tax treatments to make repatriation more favorable.  That would generate billions in tax revenues and create more jobs and investment in the US.  Current policies are destructive and uncompetitive.

Asian markets were mixed overnight.  Malaysia's unemployment rate rose to 3.3%.  Europe's markets are mostly lower.  The European summit is set to begin tomorrow, and Germany's Merkel is considering a treaty that would give more power to Brussels.

Among sector ETFs, healthcare and financials are leading so far while tech and utilities are lagging.

The 10-year yield touched 2.00% this morning but has pulled back slightly from those levels.

The dollar is higher and commodities are weak again.  Gold staged a bug upside reversal yesterday, but so far there has been no follow through and gold prices are once again lower and testing the $1365 level.  Oil prices are weaker near $96.30.  Silver and copper prices are down also.

Trading comment: The more the market runs up, the greater than chance of a sharp correction at some point.  But at what point remains the $64,000 question.  Investor sentiment has grown more bullish, but it is still far from extreme levels as many investors continue to view this rally with skepticism.  So the market continues to climb the wall of worry.  If I had to guess, I would say a true correction probably won't hit until summer.  But that doesn't mean we should get complacent.  It just means that there are still opportunities in this market.

KAM Advisors has long positions in AAPL and JPM