It is a dull day of action as mild profit-taking hits some of the stocks that have been leading lately. Breadth is running slightly negative and there really isn't much notable about the action other than the leadership of the Dow Jones industrial average, primarily due to a jump in Boeing (BA) .
The good news is that this appears to be just routine trading range action. The indexes took out the upper resistance levels earlier this week, but a solid breakout did not follow. The S&P 500 is still below its 200-day simple moving average and above its 50-day simple moving average.
The most important thing to recognize about this sort of trading is that there isn't any major benefit to trying to predict overall market direction. Strength is likely to be sold and weakness is likely to be bought.
After the Memorial Day holiday, we will be heading into the slower summer months and it will be very interesting how persistent the underlying bid will be. Since March there has been no notable weakness and trading has been quite steady.
Typically, with a bear market, we would see a few weeks of dull and dreary action that leads to some selling out of disgust and disappointment. So far in this bear market we have never seen that phase of action. The market went from panic to a "V"-bounce and there hasn't been any real disinterest. It would be logical that this phase of action will occur in the next couple of months, but there is little that is typical about this market.