The rising tide lifted all boats on Friday, as the market finished higher for the sixth week. Everyone is excited, even the naysayers, and that might be the most enormous yellow flag. The race is won by barreling toward the checkered flag and not tapping the brakes when things seem too fast.

Lots of rotation going on as investors look for value.

Small and Mid-caps stalled as institutional buying is focused on what they call “high quality” Large-Cap names.

Market Breadth

The session was overwhelmingly bullish.

The NYSE only saw 15 new lows and the NASDAQ Composite 42.

Up-to-down volume was 50% greater on the NYSE and more than 100% on the NASDAQ Composite.

Market Breadth	NYSE	NASDAQ
Advancers	1,521	2,426
Decliners	1,269	1,780
New Highs	214	212
New Lows	15	42
Up Volume	1.53 billion	3.17 billion
Down Volume	1.06 billion	1.28 billion

Heat Map

Apple (AAPL) rallied to a new all-time high after being written off 1,988 times this spring.

Chips, not named Nvidia (NVDA), struggled. Eli Lilly and Company (LLY) shed some points as the weight miracle drug field stalls.

Don’t Fear Extreme Greed

A great chart from Sentiment Trader shows how long the market can rally during extreme greed conditions.

Momentum is the ultimate self-fulling mechanism when it comes to the stock market.

Today’s Session

This week is all about earnings.  Look at the names on the calendar.

A big driver of the current leg of the rally that's helped the market break to new highs is the reaction to earnings beats, on both the top and bottom lines.

The funny part of this is it feels like watching the Russian judges during the Olympics scoring Russian figure skaters, and the Street continuing to expect good earnings.  Therein lies the rub, earnings estimates are subjective, mostly on the side of being lower than the Street, and even the company, articulated to the investing public.

Investors used to try and make up for that, with the so-called whisper numbers. Why fight the game, if we can all make a lot of money?

So right now, the earnings season is a huge success coming in above historical averages:

• Beat on earnings 64%
• Beat on sales 59%
• Beat on both 45%

We don’t fight this, but we are aware it exists, and at some point, it matters. This is why stocks take the stairs higher and elevator down.

Comments

What is your take on GTLB at this point. There was a reco to buy at $70. I waited and bought in at $58.81 and it continued it's decline. It has taken 6 months and is almost back to neutral for me. The last couple of earnings have been very good and actually profitable now yet the street didn't seem to like the beats. Is now the time to get out or would you be inclined to add more? Scott Benedict on 10/21/2024 9:48:49 AM

For now it's a hold. GTLB has received 3 positive ratings so far this month but EPS trends for FY25 have stalled. Karina Hernandez on 10/22/2024 8:51:46 AM

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