While the indexes looked much better than Monday and breadth was two-to-one positive, it was a sloppy day of trading without much conviction.
The indexes danced around to headlines about fiscal stimulus negotiations, but market players were highly cynical about the deal. The problem is that they had to stay positioned with a long bias just in case something positive did hit. No one wants to be caught short if a deal creates euphoria.
Although it was messy trading, the good news is that there still are no signs of corrective action. Some individual stocks are pulling back and the biotechnology sector was weak in places on concerns that the election would lead to pressure on pricing, but this isn't a market that is acting like it is widely extended or overvalued. The corrective action that is taking place is routine and breadth is still quite good.
Tuesday marks the kickoff of the "real" earnings season with reports from Netflix (NFLX) and Texas Instruments (TXN) . IBM (IBM) was a major dud last night, but it has been irrelevant for so long that it doesn't much matter.
This is a tricky market to navigate right now and the news flow just makes it more difficult. Manage your positions carefully and don't waste too much time trying to figure out which headlines are going to matter.
Have a good evening. I'll see you tomorrow.
