After the lackluster response to the Jackson Hole conference on Friday the indices were in position for some downside action. There was a lack of positive catalysts, negative seasonality and some technical challenges but, once again, the bears were unable to generate any momentum.
Breadth was close to even, with about 3,260 gainers to 3,390 decliners and there were more than 225 stocks hitting new 12-month highs. It was primarily biotechnology that saved the day after Gilead Sciences' (GILD) announced takeover of Kite Pharma (KITE) lit up the sector.
Gold miners also did well as the SPDR Gold Trust (GLD) broke to its highest levels since just before the election last November. That would appear to be a negative for the indices but it was ignored today.
The action Monday did nothing to change the overall character of the market. The indices are stuck in a lifeless trading range and, despite the rather gloomy atmosphere, there is still plenty of stubborn support.
Lately, I have been taking a more negative view of this market as I find the stock-picking so narrow. Still, it is dangerous to let the lack of upside progress make you assume that we will have downside instead. We have seen this market flat-line many times in recent years just when the bulls thought it was on the cusp of a correction.
It is going to be quiet this week with the upcoming Labor Day holiday, which marks the traditional return to school and work from summer vacations. Don't let the slow action lull you into being overly negative. This market has a habit of surprising to the upside when things get dull.
Have a good evening. I'll see you tomorrow.