Negative News Flow No Match for Market Positives

U.S. Stocks and Markets

The indices did a nice job of building on Wednesday's massive gains. Breadth was mediocre with only about 54% of stocks in positive territory, but the S&P 500 tacked on an additional gain of about 0.7%, and the Roundhill Magnificent Seven ETF (MAGS) led the charge with a jump of 1.5%. Volume was mild once again, but this was the seventh straight session of gains for the S&P 500.

Iran Situation Remains Complicated

Developments in Iran were not particularly positive on Thursday. The ceasefire that markets celebrated on Wednesday is already under strain. Iran closed the Strait of Hormuz again, citing continued Israeli strikes on Hezbollah targets in Lebanon as a violation of the agreement. Israel and the U.S. maintain that Lebanon was never part of the ceasefire, a position that directly contradicts what Pakistan's prime minister said when he announced the deal.

Iran's IRGC warned of a "regretful response" if Israeli attacks in Lebanon do not stop. Oil futures climbed back toward $97 a barrel on the news, giving up a portion of Wednesday's dramatic decline.

The Islamabad talks are still scheduled for Saturday, with Vice President Vance leading the U.S. delegation. Still, the ceasefire is walking a fine line, and the Strait remains effectively closed with only minimal non-oil traffic passing through. The ceasefire appears to be largely holding for now, but the Lebanon dispute could unravel it at any time.

Bulls in Control Despite the Noise

The key to this market action is that the bulls are back in control, which is driving short-squeeze and FOMO. One of the ironies of the stock market is that the action that seems most logical is often the least likely to occur. In the current situation, it would seem that after a major gain, there would be some backtracking due to persistent uncertainty about the ceasefire agreement and the risk that it could fall apart completely.

There is the usual assortment of bears who believe this market is not only unjustified but also illogical. They may be correct, but their positioning turns them into fuel that keeps the rally going. The Market Beast likes to feed on the folks who think they can tell it how to behave.

My Game Plan

I did very little today as I continue to look for better chart development.

While the action was quite good for my existing positions, it didn't create any better entry points.

I remain optimistic about market conditions as we make progress with the Iran situation and roll into earnings season, but I'm staying selective with new buys and am not feeling any FOMO. I anticipate ramping up my market exposure significantly in the next few weeks, but will do so incrementally.

Have a good evening. I'll see you tomorrow.

At the time of publication, DePorre had no positions in any securities mentioned.