It is very interesting to see how the market has acted intraday on Thursday. Following the gap-up open there was a tight range until news hit that Dutch Central Bank president, Klaas Knot, said that the euro-area economy is not weak and there is no need to resume bond buying.
That headline triggered sell program action, but, as is often the case, the breach of the support was a trigger for reversal buying. Buying kicked in and has now carried the indexes back to the highs of the day.
This is just highly technical trading that uses the headlines as trigger points. There is no major change in fundamentals or technical conditions. It is trading range action in thin pre-holiday trading. It doesn't make sense to extrapolate any major theme from this action.
I'm having a difficult time finding individual stocks that I want to trade. When that happens, I have to ask myself why that is the case. Am I out of sync with the action or is there another reason? The stocks I am holding are performing fine and I am not trying to fight a trend or anticipate a turn.
What is preventing me from finding more stocks to buy is that I don't believe that the action will be sustained in one direction. Given the ups and downs lately, that thesis appears to be correct. It is possible that we see a sustained trend from here, but until the overhead resistance falls, it is not a strong bet.
Traders shouldn't give up too easily when they are having a hard time finding trades they like, but they also should not fear being inactive. I recognize that my gains do not occur steadily. They came in spurts with the biggest gains coming in a very short time frame. When I embrace that fact, then I have far less concern about not finding much new to do even when the indexes have a nice gain.
It is good action Thursday, but that doesn't mean that it is easy to trade.