Negative seasonality couldn't do it, a more hawkish Fed couldn't do it and record-low volatility couldn't do it. The market just kept chugging along and is still hitting new all-time highs.
While the S&P 500 had the narrowest intraday range in history this month, there was still some extremely good action in individual stocks. Breadth was consistently strong and small-caps did particularly well. The FAANG names struggled a little but found their footing and cut losses for the month.
Many market players were looking for a "sell the news" reaction to the Trump tax plan, but that was a dismal failure. Even when news is highly anticipated, that trading approach has not worked well for a while. The market never seems to fully discount good news, or maybe it is that there is still enough cheap cash sloshing around out there that there is no choice but to keep on buying.
All year long, I have suggested that it is better to stick with the trend and react only after there is a change in the price action. Anticipating a pullback has been a very costly endeavor, mostly because standing aside means you are missing out on some good gains.
One of these days, the market will undergo a change in character. Maybe that will be in October, which has a reputation as a volatile month that tends to produce turning points. However, we also have earnings season starting again and that always means a new crop of trading opportunities.
Some volatility in the indices would be helpful for traders, especially as many stocks are now technically extended, but sticking with the trend is working and that is what we need to do until something changes.
Have a great weekend. I'll see you on Monday.
At the time of publication, Rev Shark had no positions in the stocks mentioned.