The market is perking up, as we are seeing some "don't short a dull market" action. The old saying about how shorting a market that is slow is based on the belief that when market players are bored, they are more likely to buy rather than sell. It is human nature to look for something positive to do, rather than find reasons to be pessimistic.
Typically, once a dull market starts to show some life, it will draw in more buyers from the sidelines and that will help to create some fear of missing out. We are seeing that tendency right now as the indexes are now hitting intraday highs. The bears had their chance to sell into the gap-up open, and when they failed to gain traction, the bulls started to slowly go to work, which is helping improve the tone of the action.
It is important to keep in mind that this market is still mired in a trading range. The S&P 500 needs to move through its 50-day simple moving average at 2944 to improve the technical picture. There is some very stubborn overhead resistance and it is going to take some decent momentum to overcome it.
With the indexes in a trading range, I'm not making any big directional bets right now. What I'm focused on are the opportunities that will eventually develop as the trading range is eventually resolved. It is likely that the Fed interest rate meeting on Sept. 18 will be the most likely catalyst for the next trend. Market players will start to anticipate that news soon, and that should give us some stronger emotions and trends.
I'll be looking for some smaller buys into the close, but I want to see that the indexes can hold near the highs of the day. The market tends to make its big moves overnight, so it is tough to hold big positions with that sort of randomness.
The great thing about the stock market is that it offers us endless opportunities for profits. We just have to keep looking for the right setups. It is inevitable that they will develop sooner or later.