Market Sees Losses but Speculators Will Have to Wait on the Sidelines

Market action was disappointing on Thursday as stocks were unable to build on the positive reaction to Jerome Powell on Wednesday. The losses were small but there was no energy in the action. The technical follow-through on Wednesday lacked vigor, and that was confirmed on Thursday with the lackluster action.

At the end of the day, breadth was approaching two-to-one negative, and there were more new 12-month lows than highs. The Magnificent Seven MAGS went green to red, and the Russell 2000 IWM lagged with a drop of about 0.6%.

The good news is that support levels are holding, and a low-level trading range is developing. The lows hit last week are serving as support. As long as the lows are holding, then there is the potential for an upside trend to develop.

There is no economic news or major earnings due out on Friday, which means there will be speculation about Trump's economic policies and debate over the health of the economy. We don't have any good catalysts on the horizon now that the Fed has issued its policy decision.

It is a very tough market to trade, and what makes it worse is that there are very few pockets of strength. Speculative traders just don't have a lot of opportunity right now.

I am still optimistic that we'll see some better stock-picking action as the market digests macroeconomic matters and focuses more on individual stocks. We need better price action before we can put more capital to work.

Have a good evening. I'll see you tomorrow.

At the time of publication, DePorre had no positions in any securities mentioned.