Price Action Appears to Be Comatose

 | Mar 16, 2017 | 1:38 PM EDT
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The bad news is that the bulls have been unable to build on the post-Fed euphoria. The good news is that the bears aren't making much progress with a reversal attempt. Breadth is pretty good and there is some underlying support, but neither bulls nor bears have been able to generate much energy.

Typically, it has been a mistake to be overly negative when the market acts in this manner. Those with a bearish inclination tend to believe action like this is a sign that a top is forming, but I can't even count the number of times the bears have failed to capitalize when they have an edge. If you have been quick to play defense at the first sign of a pause, you usually wind up having to scramble to add long exposure as the upward trend continues.

I'm at a juncture where I don't have any strong market bias. The uptrend is looking tired and there hasn't been much upside progress since the top that was hit following Trump's speech. On the other hand, the bears still haven't mounted much of an attack. They have had opportunities but they are not able to kill the dip buyers who keep bids under the market.

Typically, I let my individual stocks be my guide to my market bias. I took some hits in biotechs on Tuesday and recouped a good portion of it yesterday, but it is like pulling teeth trying to find setups right now. It is just very slow and most of the best stocks have very extended entry points.

The new result is that I'm sitting here without any strong convictions and waiting for the price action to tell me what to do next. The problem is that the price action appears to be comatose. Until we have greater movement, there is not much opportunity to react.

Stay patient and open-minded and eventually this market will tell us what to do. Right now it is mostly telling us to enjoy a long lunch and don't try too hard to make major predictions.

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