Santoli’s Wednesday market notes: The S&P 500 bounces, but the market is indecisive on leadership

Published Wed, Jun 23 20211:44 PM EDT

This is the daily notebook of Mike Santoli, CNBC's senior markets commentator, with ideas about trends, stocks and market statistics. The market keeps tiptoeing around the old record highs, much as it did for weeks before the recent shakeout. The S & P 500' s bounce off its fifth retreat to its 50-day average this year reaffirmed the general uptrend, yet the move is so far lacking in momentum, volume and breadth of stocks distinguishing themselves with their strength and leadership. A more selective, indecisive market but one nicely supported by solid credit conditions, light selling pressure, cleaner positioning after the purge of crowded trades last week and the return of a bid in the megalith growth stocks. Tech is perking above old highs but isn't clearly the new relative outperformer. Continues to be like prior post-election reflation years with calm tape, strong credit and constant rotation – 2013 and 2017. We should be so lucky. Financials and industrials haven't surrendered their relative leadership begun eight months ago, but they've corrected a bit and have had unimpressive bounces this week. Housing has great underlying supply/demand drivers yet activity is in a sharp slowdown as costs and price surges get digested, leaving homebuilders 13% off recent highs. In other words, not surprising the market is held in place for now. Lots of talk about the lack of new 52-week and even 2-day highs accompanying this bounce back to the S & P 500 high. Bonds no help on direction today, yields and the curve shape pretty static. More Fed talk about a taper fairly soon, should be pretty well absorbed at this point. Cooling Markit PMIs show we're past peak macro acceleration and probably max liquidity, but both GDP and liquidity trends are very friendly still. Spicier spec-tech starting to dance again, ARKK and unprofitable tech up 10% this month. Still plenty to prove after their months of comeuppance but shows the game here is not over: It's still a bull market acting like one. Market breadth is decent, two-thirds of all volume to the upside. VIX drowsy, just above 16. We still have a history of seasonal weakness that hangs over this week along with noisy Russell index rebalance and some month-end reallocation action. But the calendar doesn't really turn into a headwind for another few weeks, if the almanac stuff is to matter this year.

Traders on the floor of the New York Stock Exchange.

Source: NYSE

This is the daily notebook of Mike Santoli, CNBC's senior markets commentator, with ideas about trends, stocks and market statistics.