We saw plenty of green on the screens Thursday, but it was an extremely dull session. Breadth was around 4,900 gainers to 3,200 decliners, and Tesla (TSLA) helped to drive positive sentiment
The session caused frustration to rise as there was a "don't short a dull market" aspect at work that frustrated both bulls and bears. The market is at the juncture where both bulls and bears want a pullback. The bears want to stop the pain of being on the wrong side of the action, and the bulls want better entry points. The market is become quite technically extended, and there really isn't a lot of positive news to justify it.
The irony of the market is that it often tends to do the opposite of what the majority wants it to do. The easy trade would be a sell-off on earnings that produces a breakdown and fresh support at lower levels. That would be an ideal setup for the start of a fresh bull market, but it seems that it is just too well anticipated to actually occur.
The much more difficult scenario is for the market the ignore mediocre earnings, an unfriendly Fed, and a potential economic slowdown and just keep trending higher. That is the action we had Thursday and caused many folks to hold their noses and buy.
Next week we have a jampacked schedule of earnings reports and the Fed interest rate decision. The technical setup suggests 'sell the news,' but that has been the setup for a while, and it has not worked well. We will likely have another choppy session on Friday
Have a good evening, and I'll see you tomorrow.
