Trading range action continues and today it's the bull's turn to drive. Although the S&P 500 is at the same level it was on May 14, there has been a bullish tilt to the action. Under the surface there have been plenty of good trades. It is easy to see that if you look at the outperformance of the Russell 2000 ETF (IWM) over the last couple weeks.
The S&P 500 is back to the top of its trading range and as I noted on Wednesday the bulls have some momentum. Doug Kass questioned my positive view of the bounce on Wednesday but the action is the sort of positive confirmation I was anticipating.
Breadth is running nicely with about 4700 gainers to 2100 decliners and there are around 230 stocks hitting new 12-month highs.
I am particularly impressed with the pockets of momentum that keep popping up. For example Alibaba (BABA) , my Stock of the Week, and Twitter (TWTR) which was my technical buy on Monday are seeing some strong action today after churning a bit. Other China names I was trading on Wednesday such as IQIYI IQ and HUYA (HUYA) are back for more. And small names like Aejlea BioTherapeutics (AGLE) and Turtle Beach (HEAR) are acting well.
It is a great market for trading individual stock picks. The choppiness from day to day may trouble those who are trend followers -- and it is extremely difficult to call market direction right now -- but the technical setups are working and they can pay off well.
Even though the pattern suggests that we'll have some downside on Monday, I'll be looking for some new buys into the close.