The most notable characteristic of the market recently has been the inability of the indices to gain strong momentum in either direction. For example, the action started quite strong today but then a reversal in the first hour occurred and we were at day lows. The bears had a chance to do something but were unable to generate any sustained pressure. The indices bounced back up and closed in the middle of the intraday range.
It wasn't bad action. Breadth was 2-to-1 positive on the NYSE mainly due to oil but was slightly negative on the Nasdaq. New highs were limited and volume was light. It wasn't a victory for the bulls or the bears. It was just trading-range action without any strong bias.
What is missing lately is any strong reaction to news. Nothing seems to impact the market for long. The Fed, presidential politics, economic numbers, valuations and sentiments are all shrugged off as being unimportant.
The bears are extremely frustrated that the market isn't listening to them and they are pointing at some excess like an analyst who says to ignore traditional valuation metrics when it comes to Tesla (TSLA) and an analyst who says the S&P 500 can double from this point.
Some of the bulls do sound downright goofy with their optimistic predictions when we are eight-plus years into a bull market, but it isn't a good reason to proclaim a market top.
The good news is that there is some stock picking that is working. Some China names, for example, did quite well today. Alibaba (BABA) and Momo (MOMO) broke out and other names seem to have reacted favorably to fewer concerns about a trade war with China. Oil was a bright spot and a few biotechnology names acted well. The high-beta big-caps also helped out.
It is very tempting to try to guess which way this market is going to break, but it is the timing that makes that task so difficult. The best course of action is to do some stock picking and wait for a strong trend in the indices to develop. Don't spend all your energy trying to predict when the big turn is going to occur. Make some money in the stuff that is moving now.
Have a good evening. I'll see you tomorrow.