After four days of alternating strength and weakness, the S&P 500 is back to where it was at the close last Wednesday. For a while, the bears thought they had the edge and then it was the bulls' turn to be optimistic. The net result was a change in the S&P 500 of 0.03%.
That is trading-range action that I've been yammering about for a while. Neither bulls nor bears have been able to generate any sustained momentum. One day things look bad and the next they look pretty good. Yesterday it looked like the indices were close to taking out technical support, today they were celebrating a few good earnings reports from Netflix (NFLX) and others while IBM (IBM) caused issues.
Despite the dithering market action, there are plenty of folks who are happy to predict exactly what this market is going to do over the next few months. They have no track record of accurately making such predictions, but that doesn't stop them.
What I know is that the market is stuck in a trading range with a negative bias. Support continues to hold up well, but the bulls can't seem to turn things back up with any great vigor and the bears are equally inept at producing downside momentum.
Trading-range markets can be quite good for stock picking, but that isn't the case with this one. Unlike a month or so ago, we aren't seeing the pockets of speculative energy that kept traders entertained. There are a few things working like the pick I mentioned this morning, Emerge Energy (EMES) , but it is very selective.
So what do we do? We just keep chugging along looking for a shift in the action. We need not predict what will happen. We just need to stay vigilant and be ready to react when it develops. If you are mentally prepared for anything, you will be in good shape.
Intel (INTC) is tonight's big report and, so far, it is trading down on the news. Intel has marked important turning points in the market at times but it is no longer the key name it once was. Nonetheless, a negative response to INTC is the sort of thing that is going to help keep this market pinned in a trading range.
Have a good evening. I'll see you tomorrow.