Don’t Gag on Your Lolly

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The market is just lollygagging along this morning, as we have largely seen since Tuesday’s opening gap higher to start 2012. This remains a relatively tough market for swing traders, in the sense that we have yet to confirm any sort of major breakout, and there is not quite the numerous amount of setups that are usually seen in a sustained uptrend. Moreover, starting the week and year off with a huge gap that has yet to be filled makes it that much more difficult to swing with any sort of conviction.

Nevertheless, I am open to a more tempered, stock picker’s market. I suspect we will get a better idea of the true character of this market next week and beyond the Martin Luther King, Jr. holiday on January 16th. Until then, my suspicion remains that we are witnessing more holiday-style trading.

The bulls have done a solid job of fighting back each of the past two sessions, where bears tried to reverse us lower. On its face, this appears to be a bullish consolidation. As always, though, the true hallmark of a bullish tape will be stocks breaking out from technical bases, followed by even more stocks doing the same, setting up behind the leaders. We have yet to see a clear group of leadership emerge, which is another reason I continue to adhere to a wait-and-see approach.