The key to successful trading is to be in tune with the market action. We all want to be in the best stocks in the best sectors -- but sometimes, abrupt shifts in market leadership can frustrate you when you're in the wrong names. Thursday was one such day, with many traders feeling out of step with the action.
Some of the poorest-performing retailers did very well, but high-momentum software and technology names lagged. The stodgy Dow Jones Industrial Average lead to the upside with a gain of more than 0.6%, but the more-dynamic Nasdaq Composite Index couldn't even manage a positive close. Meanwhile, market breadth was positive at around 4,200 advancers to 3,000 decliners, but the number of new 12-month highs dropped to just 140 or so.
Another interesting dynamic Thursday was the strength that recent IPOs and secondary offerings saw. There have been more new issues than usual lately and they're sucking up quite a bit of capital, which probably contributed to some of Thursday's rotational action. For example, Lyft (LYFT) had its best day since it started trading recently, and that helped set the market's tone.
Although I wasn't too pleased with some of the action in my stocks, it was still a positive day for the major indices. There's good support, and there was some dip-buying in names that have been hit hard. Still, the market's leadership shifted, and that's what made the action uncomfortable for many traders.
Looking ahead, we'll have the March U.S. jobs report due out at 8:30 a.m. ET Friday, and we're sure to hear something about U.S.-China trade once again. For now, players continue to find sufficient positives to embrace -- and that's all that matters.
Have a good evening. I'll see you Friday!