Other than a little drama in Apple (AAPL), this was one of the dullest weeks in some time. If you want a particularly good illustration of how slow it has been, just pull up a chart of the iShares Russell 2000 (IWM). Over the past five days, the market has moved just 0.1% overall. What's worse, the entire trading range during that time was a miniscule 1.6%. It has held up very well but hasn't been able to build any momentum.
There isn't any big mystery about what is causing this action: It is frozen by the fiscal cliff. On one hand, market players are optimistic that a deal will be made, so there's no selloff. On the other hand, political negotiations are still going on and nothing is likely to happen until the deadline is near. Hopefully, the politicians will be eager to leave for the holidays and do something before the Jan. 1 deadline, but I'm not sure even the holidays can do much to speed up this obnoxious process.
What has been particularly frustrating about this flat market is that there hasn't been much good "stock picking" action. In a flat market, the hot money typically focuses on a few things and creates action, but it has been extremely limited and there haven't been any strong themes or speculative groups. A few things always move, but it has been unusually narrow recently.
My approach isn't to guess how things will unfold but to react as events occur, which doesn't give me much to do right now. I'm going to keep looking for interesting stocks and keep plugging away, but this cliff-lock isn't likely to end soon.
Have a great weekend -- and finish that holiday shopping. I'll see you Monday.
