The market action started out slowly on Thursday, but the follow-through momentum has been building steadily ever since. The S&P 500 is hovering at or near intraday highs as I write this, while breadth is running at 4,850 gainers to 1,830 decliners.
If the bears can't take things down pretty quickly after the opening bell, the buyers typically continue to inch in and keep a bid under the market for the rest of the day. After all, I suspect there are quite a few underinvested bulls out there that are still trying to put idle cash to work.
I think we have a low in place that will hold, but I also believe that there'll be higher volatility that will shake out traders who are looking for one-way action. That said, there are only around 80 stocks currently trading at 12-month highs, which is a good illustration of how much stocks have corrected recently. That number isn't going to pick up much until this market has trended upward for a while.
It's also worth noting that the market's pockets of momentum are muted. There are only a dozen or stocks with more than 10% gains on the day, and I continue to see weakness in groups like biotechnology (which the speculative money usually favors).
Market players have grown used to V-shaped moves after a pullback like we saw Wednesday, but it looks like we might see choppier action this time. That's due in part to the fact that there's more overhead resistance, as well as the fact that there really isn't any strong market leadership right now.
I'm focusing on selective stock-picking, but am not rushing to build up positions. I'm looking to add Rayonier Advanced Material (RYAM) and maybe in Tabula Rasa HealthCare (TRHC) to my portfolio, but only via positions that are smaller than normal.