The market did a nice job of frustrating both bulls and bears today as the indices managed only minor movement.
The bulls had the early advantage after a good close following the Fed interest-rate cut on Wednesday but were unable to generate any sustained buying momentum. While strength in Microsoft (MSFT) after it announced a dividend hike and buyback helped, breadth was even and there were few pockets of momentum.
The bears were hoping for a delayed "sell the news" reaction to the Fed interest-rate cut but sellers never gained any traction either. The indices closed near the lows of the day, which is a slight advantage for the pessimists. Still, the indices are working off overbought conditions and remain in good position for a run at recent highs.
What has been most notable about the market for a couple of weeks now is the lack of movement. There has been no shortage of news events to act as a catalyst but the indices stay pinned down. Even the Fed news Wednesday has resulted in nearly unchanged action in the indices for two days now.
This sort of action isn't unhealthy or suggestive of impending downside. On the contrary, it is usually is a good setup for an eventual move higher but we have to wonder what it is going to take to get things running. It may actually be better if there was some downside to shake things up and create a higher level of pessimism.
It is important to stay open-minded about what the market will do next and be ready to react. This action isn't clearly bad or good. It is mixed and it is frustrating due to the lack of sustained movement. There is no way to know how it will eventually resolve itself. We just have to wait and see and then act when conditions shift.
Have a good evening. I'll see you Friday.