The trading action slowed sharply yesterday and it's dragging again today. Ryan Detrick of LPL Financial noted that the DJIA's trading range of 0.22% on Wednesday was the fourth-smallest range since 2007.
In other words, the market isn't selling off but it doesn't have any momentum either. The excitement over Dow 20,000 has cooled, but I believe we are likely to take it out before we see any major downside. Maybe the breakout and failure pattern is a bit too obvious, but at this time of year there is a tendency for some surprise selling. We usually have at least one day of aggressive selling into the end of the year and it makes sense that a failed breakout over 20,000 would trigger it.
Breadth is running about 2-to-3 negative and we have fewer than 150 new 12-month highs so far. Although it is tepid action and the indices aren't doing much, some decent stock picking is still working.
Yesterday I mentioned Health Innovations (HIIQ) again and that is now breaking out over the $15 level. The stock has made a 12% move in two days, which is what traders are looking for. My Stock of the Week, Oclaro (OCLR) is also chugging along and attacking the key $10 level and is up over 8% for the week.
Another optical stock I've mentioned recently is Finisar (FNSR) . That seems to have found support and is trying to turn up. On the big-cap list Western Digital (WDC) is back on track and Netflix (NFLX) is resting.
I have to admit I'm fighting an inclination to be a more aggressive seller. It has been a good run and it is tempting to book gains to ensure that accounts remain at highs, but until the stocks I'm holding actually do something wrong, it is better to be patient.
I did nibble a little UltraShort Russell 2000 ETF (TWM) just to put it on the screen, but I'm not going to do much with it at this point.
