Friday’s -6pt decline in the SP to 1289 was the biggest pullback since Dec.2011. This pretty well sums up the resiliency of the market so far this year as another morning pullback gets bought.(at previous weeks breakout/close levels). The inevitable and inline S&P downgrades/ paused Greek debt talks and muted market reaction since has just added to the idea entering last week’s trade of Sovereign fears abating.
All in, with sov' fears abating, an easy ECB, China #'s/mkt reversing and the trade thesis remains the same with US eco’ growth being a driving force in a cyclical economically sensitive trade, led by fin’s/housing. The pullback in financials post JPM earnings doesn’t take this off the table.
Importantly, earnings from tech/ financials will take over the headlines for the coming week. Industrial earnings will test the recent US eco’ data. The housing data will test the housing rally.
Nothing has changed to the upward bias, no reason to complicate things.