Week Wasn't Bad but That's Not Necessarily Good

 | Sep 22, 2017 | 4:24 PM EDT
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What was most notable about the market action this week was what didn't happen. Historically, it is the worst week of the year, but there was no negative seasonality, the Fed surprised the market with a more hawkish tone but there was no movement, and the S&P 500 set a record for lack of intraday volatility.

Small-caps did outperform and breadth was generally good, but the Nasdaq 100 ETF (QQQ) lagged primarily due to Apple (AAPL) , which continued to see a "sell the news" reaction to its new product line. The S&P 500 and DJIA were close to flat but the lack of intraday fluctuations makes trading very challenging. (Apple is part of TheStreet's Action Alerts PLUS portfolio.)

Expectations for some negative seasonality have been quite high, which may be part of the reason the market refuses to dip. There have been a few brief pullbacks this week but they were over before they even started. The dip buying seems almost too obvious to continue in such a steady fashion, but contrary thinking sure is not working.

Next week is the end of the third quarter and there is likely to be some window dressing and positioning for earnings season. Historically, the first half of October is also weak seasonally, but that is obviously not working too well recently.

The good news is that individual stock picking continues to be robust. The last few weeks have been quite good for stock pickers even though the indices have not made major progress. That has been offset by the positive breadth and speculative action in groups like biotechnology and semiconductors.

If you have focused on trying to time the market, it has probably been a frustrating week. There just isn't much movement and the reaction to news flow can be downright puzzling. Stock picking is where it's at and that is likely to continue next week.

Have a great weekend. I'll see you on Monday.

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