In recent weeks the market has seen a number of intraday reversals, but the action Wednesday was particularly bumpy.
Three times the S&P 500 threatened to break to the downside and three times it attempted to break higher. However, when the final bell rang there was little movement from the opening levels.
Although there was little intraday momentum, it was a generally negative day with breadth running close to 2-to-1 negative and new 12-month lows exceeding highs. Semiconductors, energy, retail and precious metals were weak and banks treaded water. Small-caps lagged.
Overall it was fairly typical trading-range action albeit with a negative bias and little energy. Unfortunately, this trading environment does not hint at a sudden improvement in character. While we have seen a number of momentary spikes on meaningless headlines, the market seems to realize that the moves can't be trusted. Even the Fed minutes from the May 1 meeting had little impact as it basically rehashed what was already well known.
I'd like to tell you that we are the brink of something dramatic, but I believe the likelihood is that this random and choppy action is going to continue for a while. The good news is that it always eventually leads to some good opportunities. In the meantime, though, it is going to be a bit tedious especially with a three-day weekend on the horizon.
Have a good evening. I'll see you Thursday.