It isn't a good idea to read much into the action on the last day of the first quarter. Much of the action is driven by funds that are positioning for a good start to the second quarter -- and that may mean marking up stocks, locking in gains or raising cash. There are so many different agendas that it really isn't gameable action.
What is most notable today is the continuation of the same pattern we have had all week. A soft open, followed by dip buying. The indices have closed near their highs each day, as well, but since its Friday and the last day of the quarter, I wouldn't be surprised to see a break in that pattern.
The iShares Russell Small-Cap ETF (IWM) and Nasdaq are outperforming the S&P 500 and Dow Jones Industrial Average again. Breadth is running solid, with about 3,700 gainers to 2,800 losers. However, it is one of those days where the leadership is different than what has led for much of the quarter. Most of the stocks that have had success recently are lagging. The optical sector is a good example, and Momo (MOMO) , which broke out yesterday, has reversed today. Other than Amazon (AMZN) , the high beta, big-caps are mixed.
The repetition of the pattern of soft opens and dip buying tells us that this is computer-driven action that is focused on price action. News headlines have been ignored all week. We started off with a gap down on the story that failure of health-care reform was going to be a market negative for a number of reasons -- and that lasted for about two minutes.
I'm feeling a bit frustrated with the inability of my positions to keep pace with the IWM today. Some days, you just aren't in the right names -- and that is the case for me today. The IWM is up 2.6% for the week and the S&P 500 is up 0.94%, so there is obviously some rotation taking place. Playing it isn't all that easy.