We have mixed action this morning with breadth running about 3-4 negative and the indices with minor losses. There is no rush for the exits but it is lackluster action.
Bulls that look for the market to go up every day may be a bit disappointed but action like this has a couple of benefits. First, it helps charts to become less extended and allows for better formations to develop. Good charts are produced by the ebb and flow of the action and makes entry points easier.
The second positive aspect of this sort of action is that the best trading opportunities tend to stand out more. When there are fewer stocks moving, traders gravitate to a smaller group of stocks and that makes for better momentum. On my screens today the number of stocks that are up over 10% is down to around 25 which is about a quarter of what we saw when the small-cap indices (IWM) were really gunning higher.
An example of the sorts of stocks that traders are piling into is Kodak (KODK) which received a government loan to help it develop a business that supplies ingredients for manufacturing drugs in the US. The stock is up three-fold on the news and is being aggressively traded.
Bitcoin is hot again (GBTC) and I'm letting that run. Precious metals dipped early but are already finding buyers and look better.
The indices may look lackluster but the trading is good.