It is one of those days when the folks in the business media are all aflutter with excitement as the DJIA is about 70 points from the 20,000 mark, but traders are extremely quiet and doing little.
We have some of the boring big-caps like Microsoft (MSFT) , IBM (IBM) and McDonald's (MCD) trading very strongly, but small-caps are lagging. This is due to indexing and program trading rather than speculative stock picking.
Many traders don't like to admit it but it's nearly impossible for them to keep up with this sort of action. Since Nov. 4, the DJIA is up 22 of the last 26 days. On the four days when the DJIA was down, the biggest loss was 0.29%.
By any measure, that is a fantastic rally and is worthy of some excitement, but traders always ask, "What have you done for me today?" The answer is "not much" since the easy entry points disappeared long ago. It is a great market for riding the momentum and the buy-and-hold folks will be quite pleased, but a trader looking for some new action is having a tough time.
Positions that I'm holding like Western Digital (WDC) and Netflix (NFLX) are looking just fine, but I have not made a single new buy today nor have I talked with any trader who is doing anything significant. It is a great market for TV and the business media and it is also good for those who like to buy and hold, but it is terrible for traders who want action. The fact that there are huge gains just makes it annoying. Don't let the celebration think there is opportunity.