Early strength is being sold as the summer doldrums sets in. We still have quite a few earnings reports to come, but with the market already struggling with limited volatility, the likelihood is that the month of August is going to be very slow. The bears keep hoping for some Trump-related drama, but the market doesn't stay excited about anything for long.
In the early going, the Dow Jones Industrial Average is leading the way -- due almost totally to one stock: Boeing (BA) . The Dow is structured on a price-weighted basis, and since BA is the highest-priced stock in the index, it has the most influence. Action Alerts PLUS holding General Electric (GE) is the lowest priced stock in the index -- and it only has about a tenth of the influence, although it has nearly twice the market cap of BA.
Indices are supposed to provide an indication of the overall health of the stock market, and the Dow does a very poor job of that. Unfortunately, the business media finds it convenient and the general public has been trained to believe it is representative of the overall market.
Other indices, including the Russel 2000 ETF (IWM) and the Nasdaq 100 ETF (QQQ) are better measures of the action -- and both are performing poorly today. The S&P 500 is close to flat.
Breadth is solidly red, with about 2,750 gainers to 3,650 losers, and the number of new 12-month highs is down to just over 200.
It is lackluster action with just a few odds and ends moving. A few on my list include PetIQ (PETQ) , Weibo (WB) and New Residential Investment Corp (NRZ) . I am holding some Direxion Daily Small Cap Bear 3X ETF (TZA) and may add to that position if this drip lower continues.
