We have some 'Don't Short a Dull Market' action today. There is no immediate news catalyst and volume is light. Rather than sell slow-moving stocks, bored traders look for something to do and they create upside action instead. The bearish arguments may be logical but they aren't making traders any money, so why not buy something instead?
The indices have moved steadily higher so far. The S&P 500 is back in the green and the Nasdaq is leading as technology stocks outperform. There may not be an obvious fundamental reason for the bounce but there is good emotional and psychological reason for it.
In this sort of market, it is a mistake to focus too much on the big picture arguments that the pundits enjoy so much. It is a short term trading market and that should be the focus more so that market direction. This is not the time to make a big directional call.
One trade I took today was a buy of Amarin (AMRN) on a sharp dip. It appears that there was a short attack on the stock which looks unjustified in my opinion. The stock spiked up sharply last week when the company increased revenue guidance. I will continue to look for opportunities of this sort to build a position.
Tomorrow, the market's focus will be on Jerome Powell's Congressional testimony so we won't have the 'don't short a dull market' dynamic at work. But it is likely that Powell will be noncommittal about what the Fed is going to do next so that should produce some random movement.
You can argue about this market or you can trade it. Trading it tends to be more lucrative.
