Market Drifts On A Day (Wednesday) That's Typically Down During Expiration Week...

We had another late-day flurry of buying, but overall it was a very lazy day of trading. We had a little red on the screens, but it was very minor and hardly deserves the description of "profit-taking." On the other hand, we didn't have much energy either, other than in the last few minutes of trading.

Agriculture stocks were a particularly bright spot, and early weakness in the dollar helped gold, but oil and commodity names disconnected from the dollar trade and were weak even though the dollar was down. Other than that, it was a very mixed day with some aimless drifting.

The indices have been close to flat for two days now, and that helps us to deal with the overbought conditions, but we still have plenty of charts that look extended. Also, that doubled-headed, head-and-shoulder formation on the IWM looks ominous. If small-caps start to underperform again, that will be worrisome. However, the senior indices have done nothing at all wrong and look quite healthy. We are sitting on the brink of new highs and churning a bit as we consolidate. It is hard to find fault with that, although this mediocre volume adds some confusion.

When the market has momentum, it is amazing how sticky we can be to the upside. Even when the perma-bulls are ready for a day of rest, we can't seem to manage one. We just have to make sure we respect that strength and don't over-anticipate a change in trend. The bulls are still firmly in control.....