FLOOR TALK - No one has an edge right now

There are a few key things that traders and investors need to keep in mind as they try to navigate this very difficult market. Broadly speaking, we're in sort of a no-man's land right now. Buyers, while "nibbling" on their favored stocks each time we test the October lows, refuse to chase prices higher (instead preferring to let them "come in" to their levels). For all intents and purposes, this is a buyer's strike occurring right at the level (the October lows) where you would expect value buyers to step up. In turn this refusal to buy as prices climb has made it impossible to build on any intraday rallies we've seen over the past several weeks.On the other hand, short sellers have been in control of this market ever since the election, and have been making consistent money fading each rally. However, while the repeated tests of the October lows and the complete inability to sustain rallies suggest that the path of least resistance is a break to new 52-week lows, the market is still very oversold and prone to sudden and intense short-covering rallies -- which makes it very difficult to have a high level of conviction in putting on new shorts at these levels.What this adds up to is that both bulls and bears are showing extremely tentative behavior here as they wait for the other side to blink. More than anything this explains the seemingly "random" intraday movements of the market. In fact these aren't random at all, but represent the fierce tug-of-war going on between two teams that are equally weak and indecisive. The key thing for investors to remember is that the market is not trading on fundamental factors right now. On any given day, declines are not due to some new datapoint that sparks "renewed worries over global economic weakness" but are rather due to the simple unwillingness of buyers to commit in any meaningful way at current levels (i.e. a buyer's strike). Conversely, rallies are being fueled by short-covering rather than real buying, making them very fleeting and unstable events. This is a market where no one has an edge