Shark Bites: Market Keeps Giving Back Gains

 | Mar 17, 2017 | 12:11 PM EDT
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Unfortunately, today's market action is even less exciting than yesterday. At least breadth was positive yesterday. Today it is running slightly negative and there has been a slow drip of selling all day. There has been no dip buying interest so far and if you are looking for pockets of action they are very scarce.

We have given back the entire move generated by the Fed decision on Wednesday afternoon. The market was celebrating the perception of a more dovish Fed than expected, but many pundits question that reaction.

I discussed yesterday how the post-Fed action was similar to what we saw after the Trump congressional speech on March 1. It took about four days for the market to completely give back that gain.

This market has acted in much the same manner, giving back gains, for the second time this month. For those with a bearish bias, this is further proof that the character of the market is shifting. The bulls can't build on these momentum surges, and although the bears aren't gaining much traction, they seem to be exerting pressure for long periods of time.

The overall pattern of the S&P 500 is still an uptrend but it has issues. The move on the Fed decision resulted in a lower high, and if the lows from last week fall then there will be a minor double top. It isn't overtly bearish, but it is problematic if the bulls don't start to generate better action soon.

My trading has slowed quite a bit and I don't have much new on my radar. Quantenna Communications (QTNA) , which was a Shark Technical pick last night, is a momentum leader right now. Optical play Oclaro (OCLR) continues to recover and Ultra Clean Holdings (UCTT) shook off a short attack and is acting well. Ichor Holdings (ICHR) is similar to UCTT and trades thin but is developing well.

I have been looking for some plays in gold miners but they have fizzled out and will need further time to develop. Biotechnology is weaker today, but I've started adding to Aurinia Pharmaceuticals (AUPH) in anticipation of data at the end of the month.

The bulls still have the edge but they are lackluster and losing energy. The risk that the market uptrend may come to an end is increasing.

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