As expected, oil stocks are trading higher due to the drone attacks on Saudi oil facilities, but the rest of the market is mixed and indecisive. The news isn't impacting other sectors, like precious metals or financials, much and bonds aren't doing much after an early bounce.
The market doesn't seem concerned that the oil disruption is going to cause any major economic disruption. Most stocks are just treading water, while they wait for another catalyst.
Within one week this market has had three major news events -- aggressive sector rotation, a bond bubble and pop, a large spike in oil -- but none of the events have disrupted the stock market indexes much. During this dramatic week, there has been a small positive move in the indexes.
Some market commentators attribute this action to a high level of pessimism. Many market players are anticipating market problems and that leaves less selling pressure when a negative event does occur. When the market doesn't fall apart on the oil news, there is a greater inclination to look for some long exposure to keep busy.
The Fed interest rate decision is on Wednesday afternoon, and we have to wonder if that event will produce more of an emotional reaction than all these other big events. What is it going to take to shake this market up?
It may take more movement to the upside before conditions improve for a stronger downside move.
With the Fed news pending, most trades require a shorter time frame, but this action is so dull there simply isn't much showing up.
It is the nature of the market beast to go through these cycles, but this is a particularly odd environment right now. Major news events are producing little reaction, but the instability under the surface continues to build.