A slight shift in market character that began Wednesday continued into Thursday, but so far the selling pressure remains quite mild and no technical damage was done. The indexes reversed intraday, but bounced near the close to cut losses. The rotation action continued with lagging groups, such as banks and airlines benefiting.
One of the themes of the market since the March lows is the inability of the bears to take advantage when they have an edge. The failure to press into the close today was a good example of this.
The softer action helps give the market a more reasonable feel after the lopsided gains of the past few weeks. The market doesn't need much selling to develop a better technical picture, but many folks have a tendency to believe that it is going to be feast or famine and that once selling begins, it will continue for a while. I believe it is more likely that we see trading range action and continued dip buying support even if the upside progress slows.
Perhaps I'm just projecting my own feeling, but my impression is that some of the bulls are becoming tired and they need a rest even more than the market does. It is tough to keep pressing to the upside especially when dealing with such unusual news flow. No one expected that we would be dealing with a roaring bull market when a pandemic and civil unrest occurred. This is a truly unique time in history and navigating the market is a challenging task, even when it is in a strong uptrend.
Have a good evening. I'll see you tomorrow.