How Much Longer Can This Action Persist?

The most interesting thing about the stock market right now is the disconnect between price action and news flow. Despite the continuous headlines about the coronavirus, the market acts like it doesn't have a worry in the world. There is no fear or worry but there doesn't seem to be any emotion either. The action has the feel of extreme complacency with the bulls feeling mildly positive but not very trusting.

One explanation for this action is that there is a 'climbing a wall of worry' dynamic at work. This happens when there is an obvious negative - such as the coronavirus - but the market doesn't see a negative reaction. The folks with idle cash see the strength, fear that they are missing out, and inch into the market. That additional buying causes the indices to move higher which causes more worry about being left out and the cycle continues.

This is the triumph of price action over fundamentals and news, and is a good illustration of why experienced trades focus on price action rather than arguments about why the market isn't doing what it should do based on news and other factors.

The billion-dollar question is how much longer can this action persist. The answer is longer than most people expect. There is no easy way to guess when this dynamic may come to any edge.

Microsoft (MSFT) , Amazon (AMZN) and big cap names are leading as this action is primarily index driven here.

I'm trying my best to run with the bulls but putting money to work is a challenge. My Stock of the Week is Coherus BioSciences (CHRS) and it's off to a good start. My prior Stock of the Week, SmileDirectClub (SDC) is doing well also. Entry points require some chasing but the alternative is cash and that is paying much.

(Microsoft and Amazon are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells these stocks? Learn more now.)

At the time of publication, James "Rev Shark" DePorre was Long CHRS, SDC.