The party continued and widened to eight sectors, with Industrials (XLI) leading the conga line. Even small caps got into the mix yesterday.

The Russell 2000 is building momentum and is approaching a huge upside test.

Earnings Season Yawn

Netflix (NFLX) is reporting after the bell, but overall, earnings season has not only been a yawner. However,  important measures like profit margins are signaling a red flag.

Heat Maps

Performance remains stellar with mostly green on the screen.

But valuations continue to get stretched with fewer names changing hands at a forward price-to-earnings (F P/E) ratio considered inexpensive. Meanwhile, banks and oil producers stand out in that crowd.

Let's keep rocking but remain cognizant that on a short-term basis, stocks are overbought, which will reveal itself soon. 

It's not a cause for panic, but it would be temporary for many names riding the wave of overall enthusiasm when the pullback happens.

Today’s Session

It’s a rather muted session.  The Dow is continuing its record high, while the S&P500 and Nasdaq are down slightly, but still near all time highs.  Next week we will get the latest rate decision from the FOMC.  That, coupled with earnings, will shed light on near term direction.

Earnings continue coming in from some big names. United (UAL) posted a nice beat and the stock is up over 9.5%.  The company did also cast doubt on the continued Boeing (BA) 737 Max relationship after the latest debacle. Procter and Gamble (PG) and Verizon (VZ) also had a nice beat.  Meanwhile, General Electric (GE) is taking it on the chin after issuing weaker than anticipated guidance, and 3M (MMM) is getting spanked after it gave a disappointing full year guidance, and it is trading down 9.2%.

All eyes will be on Netflix (NFLX) when it reports after the bell.  This morning, the company announced it inked a $5b rights deal with World Wrestling Entertainment (WWE) and Ultimate Fighting Championship for an exclusive 10-year deal to exclusively stream WWE’s “Raw” program.