For many months during 2016 and since mid-December the indices have been stuck in very tight trading ranges. During these periods there are always a few pockets of strength, but the rotational action and the lack of energy prevents any real momentum from building. It isn't bad action, but it isn't very good either.
On Friday during the inauguration we saw this sort of action with a slight positive bias. Today we are seeing it again albeit with a negative bias. It is tempting to try to make more of it than we should, but it isn't significantly bullish or bearish. It is just treading of water while we wait for something to occur.
If you are bullish you probably should be rooting for a little downside to occur at this point. The problem that the market is encountering is that there isn't enough conviction among the bulls to really press. They take gains on slight strength and then prop things up again when they look to remount.
Ideally a spike in selling would flush out the weak bulls, give the bears an opportunity to rack up gains and then cover as dip buyers show up. A little fear or worry among the bulls would be the recipe for some upside down the road.
It may not look like it much, but it's a profit-taking day today. Luckily for the indices, Amazon (AMZN) along with Action Alerts PLUS holdings Facebook (FB) and Alphabet (GOOGL) and some of the other big-cap technology names are helping to hold up the indices. Under the surface breadth is running 2,600 gainers to 4,100 decliners. It isn't aggressive selling, but it is fairly broad.
The market has bounced back from morning weakness a number of times lately and we are seeing that again right now, but I believe that the bears will have to have a little success before we are going to see a better rally. The Trump skeptics need to be drawn in to a greater degree and that will set the stage for the next move higher.