One thing I've never seen discussed in the business media is that not everyone is rooting for the market to go straight up every day. The basic premise of much stock market coverage is that 'up' is always good and 'down' is always bad. Perhaps if you are a long term buy-and-hold investor that never wants to buy or sell a stock that is true, but for most market participants a little variety in the market action is welcome as it creates new opportunities.
We have a particularly good illustration of this phenomenon right now. A large group of market participants that are quite bullish about the longer-term prospects of the market are rooting for a pullback at this point because it would provide a better technical setup for a rally to end the year.
Everyone knows that the market goes throw cycles and that the action ebbs and flows so a little pullback now would be ideal for the upside as we move through the seasonally strongest part of the year.
Ironically, the fact that many bulls are rooting for a pullback is part of the reason that we aren't seeing one. These folks aren't selling. They are just waiting to buy more of their favorite names at better prices. There is no rush to take gains and sit on the sidelines.
We see evidence of this every day when the dip buyers jump in immediately on dips. Even bad news about China trade can't hurt the market for long.
We had some minor intraday selling just now but it doesn't seem to cause any real fear or worry. It simply stirs up the bulls that can't wait to do some buying at lower prices.
Typically when a real pullback does finally take place, the idea of dip-buying no longer sounds as appealing. Dip buying is always a great idea when stocks are going up but it is not nearly as easy when the selling starts to gain some momentum.
I suspect there is a large group of market participants that are bullish but will be looking to exit quickly as soon as some technical damage occurs. That damage has to be severe enough to discourage the dip buyers. We haven't seen anything like that for many weeks but that is what both the bulls and bears are trying to anticipate at this point.