Stuck in Neutral

Last night, it sure looked to me like we'd be going lower today, and for a while this morning indeed we did. But in the end I was wrong and the Dow finished the day with a 13 point gain, the fifth day in a row of tiny ranges in the market. Part of the problem for me is the huge run-up we had last week. I keep looking at that and waiting for the inevitable retracement - only it doesn't seem to want to happen. The longer we spend stuck at the 11,300 level, the less likely a near-term 200 point plunge becomes.

The indicators are still all showing overbought, but after a while at these levels they become "broken" and lose their predictive power. If yesterday's action demonstrated the bulls' inability to drive the market higher, today's demonstrated the bears' inability to knock it lower. So the tug-o-war continues. Right now, there is no trend in this market either up or down, so the "X" symbol remains in place. It's difficult for a swing trader to make any money when the market only moves a few points a day. Today for instance, I made all of $7 in the market. While that's definitely better than losing 7, it's not going to pay the rent. Even intraday, there was really nothing going on. I'm sure the daytraders aren't too happy either right now. In fact at this point, I'm seriously considering taking the rest of the year off.

So where next? I think the fact that last night the market looked for all the world like it should go lower today but finally didn't suggests that it may be poised instead to go higher. The VIX, which did in fact bottom yesterday as I had thought, was unable to gain any meaningful traction today and actually ended the day with a red candle. And right now (8 PM EST), all three futures are up meaningfully, with the ES up 0.35%. I'll update this later tonight, but right now the bias seems to marginally favor the bulls for tomorrow.

1 AM Update

Right now, all three futures (ES, NQ, and YM) are up even more, over half a percent now. Indeed, ES at 1236 is now convincingly above its November highs. This does nothing to change my opinion that we may be having another go at the Dow 11,400 level soon.

Trades

I dumped my stake in GMR today at 3.64, taking a small loss. Meanwhile, DRYS, which I sold last Friday, continued lower today, as I expected. I continue to watch this one because it may be worth getting back into when it bottoms.