The indexes traded mixed on a very quiet day, but some strength in cyber security names such as Palo Alto Networks (PANW) , Zscaler (ZS) , and Okta (OKTA) helped the bullish cause. Small caps lagged once again, and breadth was negative, but there were more new highs than lows. Pockets of speculative action were thin, but there weren't many big losers, either.
The action was a good illustration of the uncertainty that is gripping the market. The bulls believe that the Fed is done hiking rates, a deep recession can be avoided, and stocks are ready to trend higher.
The bears believe that the lag effect of 10-straight interest rate hikes has not yet been felt, and there is no way the Fed is going to pivot and start cutting rates unless there is some real economic pain first.
That is the battle that is going to drive this market for the next few months. Data, like the upcoming consumer price index and producer price index reports, will influence who is in control, but it is going to take a while for greater clarity to develop.
Unfortunately, this indecision makes for some uninteresting trading, but there are a few themes like the cyber security group. Also, there are quite a few small-cap earnings reports hitting in the next week that should produce a little speculative action.
It is not bad action, but it is not very interesting, and there is not much to do. Patience is the key to the market right now.
Have a good evening. I'll see you tomorrow.
