This Market Knows No Fear

The indices, with the exception of small caps, are drifting slightly lower on negative breadth today but nothing much bothers this market. You might think we are a little overbought and the Fed's more hawkish than expected comments would provide an excuse for some profit taking but that isn't how it works.

The pattern of action is that there is a little flurry of action on a news event like the Fed or North Korea but there is no sustained response. That is what keeps tripping up the bears that are trying to call a top. None of the potential catalysts matter very long. It is logical to think that there will be an event that marks a turning point but the computer algorithms have basically taken over the role of news. News doesn't influence sentiment because we know that the patterns of trading will offset the emotions.

Trading used to be all about understanding how emotions impact the market. These days trading is all about understanding how the computer algorithms view movement. It has reached a point of being ridiculous but now any dip is a buy regardless of the emotions it might create in a normal person. There is no fear of nuclear bombs, hurricanes or unlimited debt. All that matters is that you act in a certain way when the market moves in a certain way. The reasons for movement are secondary.

The same old pattern is playing out again. We had a little increased volatility on a new events but we quickly moved back to flat and are now slowly drifting. If you have been trying to formulate a market theory based on this action you are wasting your time.

Unfortunately the pattern suggests that we will see more flat action for a while. I hope I'm wrong but there doesn't seem to be much that is going to suddenly create some increased volatility.

I have a few smaller trades working such as Himax Technologies (HIMX) and CareDX (CDNA) , but getting money to work is a tough task.

At the time of publication, Rev Shark was long HIMX, CDNX.