Not only is the extremely flat trading action continuing Friday but the range of the S&P 500 is even narrower than what it has been the last few days.
Breadth is good with around 4,500 gainers to 2,650 decliners and there is some option pinning action that is of interest to ultra-short-term traders. However, it continues to be a market devoid of energy. It isn't bad action but it isn't very entertaining.
The primary question to ponder is whether this slow action should be used to build positions that might benefit from a better acting market next week. There certainly is going to be some hints about progress on a deal with China on trade as the negotiations resume in early October, but that is still far enough away to not be an immediate catalyst.
While earnings season is still a few weeks away, we do have the end of the quarter coming up and there may be the potential for some allocation activity as that approaches. There already was some substantial rotation action last week and you have to wonder if there will be another bout as the third quarter comes to a conclusion.
Stock-picking continues to be extremely difficult. There is some green on the screen but there isn't sustained momentum. That is fine if your time frame is very short, however, if you are looking for position or trend trades that will last days or weeks there is very little setup.
I have a few names on my radar like Recro Pharma (REPH) and Ocular Therapeutix (OCUL) that should have some positive catalysts soon although there is no reason to build them when there is so little movement.
Flat markets tend to produce favorable technical setups, but this one may put us to sleep while we wait for further developments. Despite any talk about a potential breakout, this price action lacks the momentum to make a convincing move right now.