Nearing the halfway point of January, even the best stock picks have yet to deliver a meaningful direction for investors.
It’s true, the market did bounce back, albeit slightly, on Tuesday after a three-session “losing” streak for the broader market. But the year’s closing high set last Wednesday is still keeping a lid on another leg up, while its close on Dec. 31 acts as a buffer in the opposite direction.
Consider this string of the past three closing points for the S&P 500, heading into Tuesday: 1274, 1272, 1270. What, then, did Tuesday bring? Try 1274 on for size. One would think it was the week after Christmas for all the action we’re seeing.
Officially, the Dow Jones Industrial Average rose 34 points to 11,672, while the Nasdaq tacked on a similar 0.3% gain to 2717.
In one sense, it could be seen as bullish that the market did – by a half-point — close above the level of the past three sessions. But bulls will undoubtedly feel more emboldened if they can push the S&P 500 to a new 2011 record.
Bulls also found comfort in a strong day for commodities, with silver and gold both higher. But that, too, brought its own concerns – oil jumped back above $90 a barrel to $91.15, and the market’s long-term prospects with crude closing on $100 are dicey, at best.
Breadth, too, was in the bulls’ favor – 60% of NYSE advanced, while the same ratio of Dow components rose.
But here, too, was something for pessimists: financial stocks finished higher, the SPDR Financial Select Sector (NYSE:XLF) exchange-traded fund gained 0.4%, however, a gap remains between here and the highs set last week.
And that’s not to mention what appears to be the end of the recent parabolic rise in shares of Apple (NASDAQ:AAPL) which brought out a sell-the-news reaction to its iPhone deal with Verizon (NYSE:VZ) by traders on Tuesday after a 6% jump in 2011 alone.
All of which suggests that Wednesday could be meaningful for breaking the market out of the recent 1.3% trading range in which it has sat since last Tuesday. Unless, of course, it isn’t.
