The market managed a little Monday morning momentum before being smacked by the very poor ISM report. In the battle between technicals and fundamentals, the fundamentals took control with that news and now we have to see if the bulls can regroup and gain back their momentum. The news was really quite poor, so it is going to take some effort by the buyers. Plus, the thin trading will keep it choppy and random.
Even though the market reversed hard on that ISM news, the action is still quite mixed. Breadth is running 2,300 gainers to 2,700 decliners and biotech and banks are leading while oil, chips, steel and gold lag.
I've been doing a little selling into strength this morning, as some of the names I've mentioned lately such as Mellanox Technologies (MLNX), VirnetX Holding (VHC), Nationstar Mortgage Holdings (NSM), Neptune Technologies & Bioresources (NEPT) and Amarin (AMRN) continue to run.
I'm looking for some trades but I want to stay selective and not find myself trapped when volume dries up. Fear of illiquidity seems to be driving better action in some of the bigger-cap names, including Apple (AAPL) and Priceline (PCLN), and that may be the way to go to stay active.