The most notable aspect of the market action Wednesday was that it was one of the narrowest ranges of the year for the S&P 500 and Dow Jones Industrial Average. Neither buyers nor sellers showed much conviction. Stocks just drifted around, albeit with a negative bias.
One positive was that there was some relative strength in small-caps, which finished in positive territory. This is primarily a function of more focus on stock-picking as the indices trade flat and don't offer as much opportunity. That is a dynamic that we'd like to see expand, but this action is quite tentative.
The market is at one of those junctures where prevailing bias tends to color how you view the action. The bears can find plenty of negatives to support their views, and the bulls can find good arguments for their position. With no immediate news events on the agenda, there are many market players biding their time and waiting for a bit more clarity and some stronger movement.
A couple good reports from Lululemon (LULU) and Restoration Hardware (RH) may help the mood, but it's looking like trading-range action in the near term. That is a good thing and will give the bulls a slight edge going forward.
Have a good evening. I'll see you Thursday.
