The market suffered its second day of selling after a big start to the new year, but buyers came in intraday once again and it managed to close fairly well. Breadth actually moved almost even by the time the closing bell rang, as small-caps continue to lead the market.
This morning I discussed how the market is likely to reward stock-picking because there aren't any political or macro headlines moving it around. The fact that there is speculative interest in small-caps is solid evidence that stock-pickers are gaining traction.
Technically, the indices continue to look healthy. There was a big gap-up move and that gain is consolidating nicely. The market hasn't breached the lows hit the first day of the year, and that is key.
Trading in this environment reminds me of the old days, before we were constantly shoved around by central banks, economic reports, Europe and politics. There is appreciation of the individual aspects of stocks, and that makes for good trading if you are a stock-picker.
The Alcoa (AA) report is out and receiving the typical ridiculous coverage. The numbers were in line, the stock is up about $0.08 after hours -- and it doesn't matter one bit. We'll have to wait another week or so for the reports that really matter, but if we continue to focus on stock-picking rather than headlines, we will be in good position to make money.
Have a good evening. I'll see you tomorrow.
