The market gapped up to start the day primarily due to positive reactions to earnings news and hopes that the recent V-shaped bounce may find a second wind. Despite the strong open, there doesn't seem to be much inclination to chase the strength. At 10 am about 800 stocks were up from the open while 2350 were lower. Breadth is quite good at 5800 advancers to 1150 decliners but it is interesting to note that there are only 22 stocks at 12-month highs and 14 at 12-month lows.
While the action is positive I see no reason to do much building of longer term positions. There is no reason to believe that the indices are going to hold at this point. There is no great underlying support and there is some fairly significant overhead resistance at recent highs.
Small caps (IWM) are lagging and precious metals have the best relative strength of any sector. Neither of those facts is particularly bullish.
The only alternative left is to work on short-term trades. I'm not feeling any great edge with indices so I'm looking at individual stocks. There isn't much momentum so I'm looking for something coming off a support level such as Trillium Therapeutics (TRIL) .
The S&P 500 is now around the lows of the day and the buying momentum is quite limited. This is not like some of the recent strength when there was a great willingness to chase a strong open. We will see how this develops but it is looking like the trading range I've been talking about may be developing now.