The pattern of action shifted a bit Thursday morning with a weak open, but the dip buyers are active and the indices are well off the early lows. While breadth is poor with around 2,625 gainers to 4,150 decliners, this is mainly looking like some run-of-the-mill profit-taking and consolidation after a big bounce.
The market has a good excuse for some profit-taking as it looks increasingly likely that President Trump will use "emergency powers" to deal with the border issue. This sort of precedent is very worrisome to market players that wonder what issues in the future may be characterized as "emergencies."
One of the ironies of the current market action is that virtually everyone can see that it is extended and that a rest or pullback makes sense. It is just common sense that there be some slowing after a 10% move but, as I discussed in my opening post, that sort of thinking is undermined by computer algorithms that look to take advantage of common sense.
If you are trading individual stocks this sort of action is especially challenging as it destroys prudent entry points. If you want to put money to work there is little choice but to chase and ignore extended stochastics.
The indices are nearly back to flat as I write and squeezing shorts again. There really is no immediate news reason for the market to run but it isn't really news that drives the market these days.
I've locked in some recent gains and have been looking at index and sector shorts for quick trades. I see very little in the way of individual stocks I want to buy right now.