Outside of some reaction to headlines about the Fed and trade with China, the market has been extremely dull lately. Things are holding up, but there is little energy.
We had another example Monday with the Nasdaq doing well primarily due to Apple (AAPL) and Microsoft (MSFT) , but overall market breadth was slightly negative and there were actually more stocks making new 12-month lows than highs. Only around 53% of all stocks in the market are trading over their 200-day simple moving average, which is surprising given how close the senior indexes are too all-time highs. It is largely a function of weakness in small caps, but a 1,000 weak small caps are offset by a stock like Apple.
Traders are hoping that earnings might stir things up, but so far the reactions are not having much impact on the overall market. The strength Monday in some of the big cap technology stocks is going to make it difficult for buyers to keep chasing unless they put up some really stellar numbers.
Not only was the price action mixed, but volume was lackluster, too. It looks like SPDR S&P 500 exchange-traded fund trust had its second lowest volume of the year. With all the indexes near highs, earnings season is picking up steam, the Fed is about to announce an interest-rate cut and rumors about China trade, how is it possible that this market barely has a pulse?
The bears will tell us that is a sign of trouble, while the bulls will tell us that it is just a healthy pause, before we run up on a dovish Fed. I don't know who is right, but this action is making it tough to hold a lot of inventory.
The trend is up, and the bulls still have the benefit of the doubt. But this is an awful dull party.
Have a good evening. I'll see you tomorrow.
Apple and Microsoft are holdings in Jim Cramer's Action Alerts PLUS member club.