So far on Friday, the indices were trading in their tightest range in weeks. There was a gap down open but it hasn't produced any major dip buying or further selling pressure so far.
Breadth is poor with around two losers for each gainer and there is still a very small number of stocks making either new 12-month highs or lows. There isn't much standing out as far as sector performance other than some speculative interest in marijuana related names. Oil is finally pulling back after a long winning streak, FAANG names are mixed but semiconductors are positive.
Obviously this market is in need of some rest and consolidation after the big run after Christmas. It would cause the most frustration for many traders if the overbought conditions were relieved with some churning rather than a pullback but so far its been very tough for the bears trying catch some downside.
I believe it is a mistake to expect that the recent lows will be tested any time soon. A pullback makes sense but with the Fed now dovish and earnings season fast approaching, there is going to be some good support well before the indices get anywhere near the recent lows.
It may be a little dull today but this is exactly what is needed for charts to develop better setups. They need some consolidation which will provide a foundation for another push higher.
I've been trying to catch a little downside but there isn't enough pressure to make it worthwhile, and with the S&P 500 hitting the intraday highs as I write I have no interest in trying to pursue a downside trade right now.