"Nothing is more revealing than movement."
The question, once again, is whether there is a news event that is going to finally push this market into a trend. The lack of movement is causing great frustration for many market players and suggests that something dramatic will eventually occur.
Since July there have been a number of significant events, such as a more-hawkish Fed, a recovery in oil prices, the evolution of Brexit, the presidential election and plenty of economic news, but nothing has pushed the indices into a trend. The pundits keep predicting the next move, but the market refuses to budge.
After the small gains yesterday, the S&P 500 is right back in the middle of the latest range that developed after the drop on Sept. 9, when worries about higher rates caused a one-day selloff. The indices did hold up when they tested support levels last week, which is good news, but there just isn't any strong momentum out there. The S&P 500 is up two days in a row, but it's hardly been an energetic rally.
Last night's presidential debate doesn't seem to have any impact on the market this morning. Few folks have changed their minds at this point, and the big headline was Donald Trump's refusal to say he will accept the results of the election. The market seems to be anticipating a win by Hillary Clinton, but it is control of Congress that is really the main uncertainty at this time. The market wants gridlock, and that seems to be the expectation still.
The other big news this morning is the European Central Bank decision and the follow-up press conference with President Mario Draghi. No policy change is expected, but the focus will be on hints about the extension of the ECB's bond-buying program and the possibility that it may be broadened to include other assets such as ETFs.
For traders, the great challenge of the market lately is that not even the central bankers are producing any real volatility. There is an initial move on news and then the action fizzles out and things fall back into the trading range. The market seems to have priced in everything lately and it can't generate any sustained action.
We have more earnings reports to digest, but they have been a mixed bag so far. Last night American Express (AXP) surprised to the upside, but eBay (EBAY) disappointed with poor guidance. Yesterday Netflix (NFLX) provided good news, but that was offset by weakness in Intel (INTC) .
Strength in oil and some of the big-cap names such as Facebook (FB) and Alphabet (GOOGL) helped the bullish cause yesterday, but it has been a tough market for stock picking lately. Breadth has been pretty good, but there simply aren't many stocks making sustained moves. Good trades need follow-through and there just isn't very much right now.
We'll see what the ECB and Mario Draghi have to say, but even if they do produce a move in the market the pattern is that it won't last for very long and the trading range will continue.