We're seeing such very slow trading once again this Monday morning, although strength in Apple (AAPL) , Microsoft (MSFT) and semiconductors are holding the key indices up. Breadth is also good, with around 4,300 gainers vs. 2,400 decliners.
Despite some reaction to headlines about potential interest-rate cuts at the next Federal Reserve meeting, the market action has been surprisingly sedate lately. Volume hit multiyear lows during several sessions recently, while intraday trading ranges have been very narrow. Small-caps have been particularly quiet.
Only 85 stocks have hit new 12-month highs so far this Monday, which illustrates the market's lack of momentum. Yes, plenty of stocks are trading higher, but few are doing so with much vigor.
While that isn't bad market action, it doesn't present active traders with much opportunity. It's as if many players are waiting for earnings or the Fed to create some drama.
Last week, the indices closed at session lows twice -- a fairly uncommon event so far this year. We'll have to watch to see if it continues, as intraday reversals and closes at session lows can be signs that a market reversal is starting.
A series of that sort of action will be cause for concern, so for now, I'm doing very little. I won't consider any new buys until I see what the market action looks like later Monday. If there's more selling pressure late in the day, I'll be looking at potential index shorts rather than new buys.