Market players are standing aside while they await the Fed's interest rate decision on Wednesday afternoon. The exchange-traded fund, the SPDR S&P 500 Trust (SPY) , not only had its lowest volume of the year, but also its narrowest range of the year.
Despite the lethargic action, some positive movement came in biotechnology, because of the takeover action in the sector. The SPDR S&P Biotech (XBI) exchange-traded fund had a very solid gain of 4.7%. Speculative traders didn't have much else with significant movement to trade, so they focused primarily on that sector.
Despite a little late selling, breadth came in slightly positive and there were 260 new 12-month-highs, which was pretty impressive for such a dull day. The best thing the market has going for it is some speculative interest in small caps and biotechnology.
There were a few headlines about China trade and the economy Monday, but all of that is secondary to the looming Fed decision. Fed futures currently indicate that a rate cut is unlikely, but the main focus of the market will be on the policy comments and the likelihood of a cut at the July meeting.
We'll have endless talk and speculation about what the Fed might do and how it will impact the market, but we simply have to be patient and see how conditions develop. The bulls still have the advantage and the market appears to be generally optimistic, but volatility is very likely to pick up on Wednesday afternoon.
Have a good evening. I'll see you tomorrow.