After weakness in the afternoon for the second day in a row, stocks bounced back Thursday in the final minutes and ended with a decent day. Breadth was 2 to 1 positive, and there were 800 new 12-month highs.
For a couple of weeks now, there has been better action under the surface of the market than there has been in the indices. This is a reverse of what was happening previously as indices hit new highs on negative breadth and poor action in secondary and growth stocks.
There has been very good trading action for about two weeks now, and many stocks look quite good, but the indices are extended and look vulnerable to some sort of pullback. We have seen two days in a row when the market weakened in the afternoon, but it hasn't been bad enough to cause any real change in market character. Traders have stayed busy, stock-picking has remained productive, and there isn't any rush for the exits indicating a major change in character.
Friday we have the monthly jobs news in front of a long weekend. The reaction to the jobs news has been positive every month since October, even when there was a miss. The day in front of a holiday also tends to have a positive bias, but I'm sure many folks will be heading out early.
We should have some speculative trading opportunities again, but the indices are showing signs of weakness, and that may slow things down.
Have a good evening. I'll see you Friday.