The market is slowly moving higher on very thin volume. Breadth has improved nicely and is running about 4,000 gainers to 2,550 decliners and we have about 150 new 12-month highs.
There really isn't any particular reason for the continuation of yesterday's computer-driven bounce, but if we can rally on a negative catalyst, then why shouldn't we rally when there is no catalyst?
The question at this point is whether the bulls can manage a three-day bounce for the first time since July 20. While there has been good support just when needed, the bulls have not been able to generate sustained momentum. Every selloff attempt has ended quickly, but the bounce slowly loses steam and then we have another sudden drop that brings in dip buyers and starts the process all over again.
With the indices at intraday highs, the worry about being left out starts to kick in and underinvested bulls scramble to put cash to work. When that happens, the Nasdaq-100 (QQQ) tends to lead, which it is doing now. Big liquid names like Amazon (AMZN) and Alphabet (GOOGL) are the first ones the bulls look to when feeling underinvested. (Alphabet is part of TheStreet's Action Alerts PLUS portfolio.)
I can understand why there are many bears anxious to short this market. It is hard to put money to work in this market. It would be much easier to aggressively press shorts in a long-overdue market correction, but if and when the market is slowly inching higher and the only idea you can come up with is to short, then maybe you are letting your hopes cloud your vision.
One chart I'm looking at is Winnebago Industries (WGO) . RV sales have been running very strongly recently and the hurricane in Houston is likely to increase demand for them as temporary shelters. The chart is working on a base that is a little over two months long. It needs a mover over $35.50 to trigger a breakout.