The market broke out of its recent range last week to move to new 5-year highs. Those types of headlines tend to make folks more bullish about stocks. In the short-term, the market looks a bit overbought. We are also getting into the meat of earnings season, which could lead to some pullback in the market.
In economic news, existing home sales for December hit 4.94 million units, but this was below estimates of 5.10 million units.
The big report we are waiting to see is Google (GOOG) which reports earnings after the market close today.
Stocks rising on earnings: DD, VZ, KSU, PETS, FCX, TRV
Stocks falling on earnings: JNJ, EAT, IIVI, WAT
Asian markets ended mixed after the Bank of Japan confirmed that it will pursue unlimited quantitative easing and a 2% inflation target to combat its two-decade plus bout with deflation. China finished -0.6% lower. China's Bank of Communication expects the country's 2013 GDP growth to reach 8.5%.
[Related -Google Inc (GOOG): Why Nest Labs Deal Is A Wakeup Call For Apple Inc.?]
European markets were generally lower this morning. Eurogroup head Juncker said Cyprus may receive a bailout in March, following elections.
The dollar index is higher this morning but this isn't hurting commodities. Oil prices are higher near $95.85 and gold prices are up to $1690.
The 10-year yield is firm at 1.85%. And the VIX is bouncing after Friday's plunge to multi-year lows. It is currently up 6.5% to 13.25.
Trading comment: The market has a solid week last week. Earnings season is heating up, so we could easily see more consolidation in the market. But for now the market appears to be in that stair-step mode we have seen before where it rises, then consolidates the gains in a mostly sideways fashion before moving higher again. No doubt we will have a bigger correction at some point in Q1, but its possible it will be from higher levels in the stock market and also higher levels in the bullish sentiment indicators we follow.