"You can't win unless you try to win, but you can lose by trying not to lose."
-- Jack Campbell
The market regained its footing on Friday, after worries about the health of Deutsche Bank (DB) receded. The main catalyst was that the Department of Justice was rumored to cut the fine it was seeking by nearly $10 billion. There is still no clear confirmation of this news, but the market was satisfied that the immediate danger had been addressed.
We are starting off this morning with some strength in oil on an oil spill and some weakness in the British pound as Brexit talk heats up again. Prime Minister May appeared to favor a "hard" view of Brexit and set the stage for the formal process to begin by the end of March 2017.
None of this news is having much impact on the indices in the early going. The S&P 500 is indicated close to flat. There is a sense of relief that the markets have dodged a potential disaster of a bailout of Deutsche Bank DB, but that isn't creating any great buying demand.
Since the Fed interest rate decision in early September, the market has been increasing instable as it deals with a steady stream of macro headlines. None of the news has had a lasting impact, but we are seeing some jump around within a trading range. The bulls were unable to gain sustained traction on the OPEC oil deal, and the bears were incapable of breaking through support on Deutsche Bank. The central bankers continue their jawboning and promised of endless help, but the market isn't running on that at this point.
Since mid-July, the market has had three long trading ranges. In the first two cases, we had a one-day move out of the range, but that did not result in a trending market as many technicians had anticipated. Instead, we quickly fall back into another range.
The trading range since the September breakdown has been wider and we are back up near the top of the range, but the buyers are still unable to produce any sustained momentum. There is no clear trend right now, although the general action is positive.
The good news is that underlying action is strong enough to offer some opportunities for stock pickers. It isn't a broad based rally, but there are names like Amazon (AMZN) , GW Pharmaceuticals (GWPH) and even Twitter (TWTR) that are acting well and attracting attention. It also didn't' hurt that Nutanix (NTNX) , the hottest IPO of the year, hit on Friday.
The indices don't offer much edge right now so if you are looking for opportunity you need to look at individual stocks. When the level of stock picking opportunity shifts that will be the time to focus more on the indices.