Pro Analysis

Santoli: Bullish tape defies calls for a dip, now demands respect

A trader works on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Friday, Feb. 10, 2017.
Michael Nagle | Bloomberg | Getty Images

What happens to a dip deferred?

Even before Wednesday's powerful 1.4 percent rip higher in the major stock indexes, the market had for weeks been steadfastly refusing to succumb even to a modest dip, despite an accumulation of short-term tactical cues that suggested one was about due.

All bull markets punish the cautious buyer by refusing to furnish easy entry points, but this rally phase has been more punitive than most.

Teasingly, the Dow Jones Industrial Average on Tuesday closed down by a trivial 0.1 percent after having closed at a record high for 12 straight days in the first such streak in 30 years.

More measures of how uncommonly steady and resilient the tape has been: The S&P 500 has not had even a 1-percent daily loss in 96 trading days, one of only a dozen streaks of that length since 1950; it hasn't been down 3 percent from a 52-week high in 74 days, the longest stretch since 2006; before Wednesday, the average intraday trading range for the index was the smallest dating back to at least 1983.

So it's been slow torture fighting this move and humbling to be among those handicapping a likely pullback.

Trust me: A couple of weeks ago, I argued in a column it made little sense to chase the rally, though staying in stocks made sense. The case then: