Even War Talk Can't Get This Market Excited

 | Aug 09, 2017 | 4:39 PM EDT
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If you are a buy-and-hold investor you are probably pleased with the market's calm response to the drama over North Korea. The indices barely budged despite the breathless reporting over the potential for nuclear bombs. However, if you are an active trader the lack of momentum on the news was probably annoying. It is tough to trade when there aren't any emotions moving things around.

Unfortunately, this benign action is nothing new. The buy-and-hold crowd and the indices are happy to see the endless uptrend endlessly continue. Traders are bored and restless and have been relegated to buying any and all dips regardless of news or fundamentals.

Although I'm perturbed by the absence of meaningful action, there are some warning signs developing. While there was solid support and good dip buying, it didn't lead to any chasing. Breadth was abysmal with about 1,900 gainers to more than 4,800 losers and there were only about 110 stocks making new 12-month highs. That is very poor, although losses were shallow and it was mainly small-caps that suffered.

I did increase some short positions today and cut a few longs but believe that the most likely course of action for this market in the near term is more very dull days. Don't look for a big move unless there really is some truly surprising and unexpected news.  

The last two weeks of August are peak vacation time on Wall Street and can be deadly dull but in this market even talk about nuclear bombs produces a yawn.

Have a good evening, I'll see you tomorrow.

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