The S&P 500 and the iShares Russell 2000 Index (IWM) broke a four-day losing streak as market players showed a remarkable lack of concern about the G-20 meeting in Osaka. No one seems to expect a resolution on the trade war between China and the U.S., but apparently even minor progress will be enough to please the market.
The market is backstopped now by the uber-dovish Fed, so market players can afford to be patient on the trade dispute. Also, potential for a surprise positive headline still exists, so it's difficult for the bears to press.
The other notable action Thursday was strong out-performance by the small-cap indexes (IWM). This is likely due to the Russell index rebalancing, which takes place at the close tomorrow. This is often one of the highest volume days of the year, but it is primarily a function of large blocks crossing at the close.
The increased volume and interest in a host of small caps can be a bit deceptive as many of these stocks will not see sustained follow-through. Beware: This is a technical action that's not driven by fundamentals.
In addition to the small cap strength Thursday, there was strong action in biotechnology as well. Some of this is index-related, but there are some interesting stocks in the group that are looking to break out. If they can hold up as the index rebalancing takes place, they should provide some opportunities next week.
Grayscale Bitcoin Trust (GBTC) bit overconfident bulls Thursday, but the increased volatility is going to attract trading interest, especially if we get more dull summer trading.
Gold is resting after its big recent run, and I'll be watching closely for some entries into miners. The VanEck Vectors Gold Miners (GDX) exchange-traded fund is of interest.
Have a good evening. I'll see you tomorrow.