The market action was mixed and rather dull for most of the day. Oil made a strong move, and Bed Bath & Beyond (BBBY) took some of the energy out of the speculative action, but it was an ideal setup for a "don't short a dull market" rally into the close.
The S&P 500 bottomed around midday, and it was a steady uptrend into the closing bell before some end-of-the-day profit taking. There wasn't any obvious news, but the dollar was very strong, and bonds were flat. There were a few hawkish comments from Fed members, but the market doesn't seem to be paying much attention to the Fed's recent yammering.
The psychology behind a "don't short a dull market" action is that when trading is thin and there isn't any significant news flow, then it is easy to push stocks higher. There usually exists a positive bias, especially after a strong run, and traders are quickly reminded about their recent fears of missing out.
This sort of action doesn't mean much. As I discussed earlier, the likelihood is that we will see some trading range action as we digest recent gains, but the risk is that it will eventually resolve itself to the downside. It would be too easy for traders if the market just suddenly collapsed after it became extended into key overhead resistance.
We have options expiration on Friday, which may add a little volume and volatility, but we are the dog days of summer, and we are likely to thin and random trading until we have some significant news flow to respond to.
Have a good evening. I'll see you tomorrow.