After a big gain on Monday, the indices are trading very quietly in a narrow range. Breadth is very close to flat and the number of stocks at new 12-month highs is down to around 100.
After a very brief pause, there is a rotation back into the 'new' economy stocks. This action favors stock picking and produces some 'hot pockets' of action. Schrodinger (SDGR) , Datadog (DDOG) , and Seas (SE) are a few good examples.
This sedate action makes it a good time to think about your overall market strategy. Quite a few folks are intently focused on whether or not the bounce off the March lows is just a very vigorous bear market rally or is it a strong start to a V-shaped recovery?
While it is an interesting question to contemplate, it isn't a question that you have to answer. There are plenty of people in the business media that ponder these things and it provides some interesting content but it can be counterproductive to have a rigid opinion.
I not only am happy to admit that I don't know what the market will do over the course of the summer but I actively cultivate the lack of an opinion. My goal isn't to predict what might happen but to aggressively trade what does happen. Up, down or sideways - it really doesn't matter. I'll take what the market has to offer and let others wallow in their 'rigorous' arguments about what the future might hold.
The best thing I see about this market right now is that stock picking matters. The action isn't being driven by big moves in the indices. It is driven by individual stocks and that means there are more opportunities. I don't know what will happen in the future but the trading is looking pretty good right now.