Despite its historic tendencies, August has been a very good month for traders, so far. August is historically one of the poorest-performing months of the year -- along with September. In addition, we usually see much greater levels of volatility.
According to Ryan Detrick of LPL Research, the S&P 500 has now gone 28 consecutive days without a 1% move in either direction. That is the longest streak of flatness since 32 days in a row back in September 2014. There also hasn't been two consecutive down days since the reaction to the Brexit vote back on Jun. 24 and Jun. 27.
What is remarkable is that despite the fact that the indices have been nearly comatose, there has been exceptionally good action in many individual stocks. Breadth has routinely been quite positive, and the new 12-month highs keep piling up.
This action is the opposite of what we suffered much of last year, when the average stock lagged the indices by a substantial amount. In 2015, it was the FANG names and a small group of big-cap stocks that drove the indices, while the great bulk of stocks under the surface acted very poorly. Last year offered a good market for timing and indexing. This year has provided a good market for stock picking.
I'm hopeful that this stock picking dynamic will continue, but there will undoubtedly be periods of profit taking and consolidation. Today looks like one of those days. Breadth is running about 2 to 1 negative and volume is very light. My scans of the market for movers on above average volume is producing few results.
The major weak spot today is metals and mining stocks, which are reacting to a strong bounce in the dollar caused by some hawkish remarks from Fed members. Strength is in the chips sector, which is being led by Applied Materials ( (AMAT) ). Advanced Micro Devices ( (AMD) ) is also exhibiting very strong momentum.
Once chart that caught my eye today is Quotient Technology ( (QUOT) ), which operates a promotion platform that offers digital coupons to consumers. The stock has been testing the $14 level since June, and is trying once again to push through that level.
The dip buyers did their job once again this morning, after a weak start, but it is looking like a slow August Friday. We'll see what pops up on the radar later in the day.
