Trump almost ruins his own market rally after negative comments on drug stocks, but Dow resilient

Trump era political risks

The tape remains pretty resilient, doing what's necessary to keep the indexes hovering near their highs. Different sectors are taking their turn in the lead on a day-to-day basis. Riskier stocks have been leading for weeks, the financials won't rest, corporate credit is firm, semis are well-bid and the transports are in a momentum trance.

So it's hard to find too many alarming cracks in the market just yet. Here's what I'm watching heading into the closing bell:

Trump knocks biotech

The nasty PEOTUS-prompted drop in health care is masking a strong market beneath the surface.

Two-thirds of NYSE stocks are higher and the equal-weighted S&P is up twice as much as the benchmark. Money continues to shuttle among sectors, but doesn't depart the market with any urgency (yet). It remains reminiscent of August — the market drifts sideways to up after a quick panic and upward repricing, lolling around and churning; maybe we get a little pullback to jolt people awake as we did then, because it's not often that the indexes merely trudge listlessly deeper into new-high territory — at least not to stay there.

Bonds won't go quietly

Defensive sectors get a bid Wednesday as bond yields relax lower again. Maybe the drop in Treasury yields shows a bit of caution ahead of the ECB meeting and Fed next week? Or is it that "35-year bull markets" don't die quietly no matter how many people insist on burying them? In any case, the outperformance of stocks versus bonds had become quite stretched lately. Here's a look at the S&P 500 ETF (SPY) versus the iShares 7-10 Year Treasury Bond ETF (IEF):

A little give-back probably makes some sense, even if you think that's a clear, durable breakout in favor of stocks over bonds:

"Tinder trader"

The biggest near-term concern is probably sentiment. Signals continue to accumulate suggesting both the fast "Tinder trader" crowd and the "long-term commitment" investors are feeling pretty comfortable, perhaps overly complacent right now. The VIX under 12 is not in itself a sell signal; it largely reflects how calm the market has been lately, and the prospect of a sleepwalk toward the holidays.

But when expectations of short-term volatility get this low, stocks can become susceptible to little windstorms started by unassuming butterflies. (Might the ECB see inflation nearer to its target and not promise more QE? Will we get a DJT tweet hostile to some beloved company or sector? Who knows?) The weekly Investors Intelligence bull/bear poll probed further into the happy zone with bulls near 39 percent and bears below 20 percent. The CNNMoney Fear/Greed Index is at 79 on the 100 scale. It was higher briefly in the summer, but once it gets up near 80 there tends to be pretty limited immediate upside.

Trump trade stretched?

I'm monitoring a couple of names as direct reads on the most simplistic versions of the so-called Trump trade: Goldman Sachs (higher rates, deregulation, deals and "friends in high places") and United Rentals (equipment for building roads, bridges, walls and luxury resorts). They're breathing some pretty thin air up here:

Consumer strength

I'm more interested in the sturdy action in stocks tethered to the consumer, which are less clearly dependent on hoped-for legislation. Autos are having another good day, specialty retail and consumer-finance companies are leaders as well. (Discover Financial is up 3 percent to a new 52-week high.) Is the market trying to say we could be in for a flush or borrow-and-spend at least in coming months as everyone un-clenches from the campaign and tries to look on the bright side? We'll see…