Anything Happen While I Was Gone? Not Really

 | Jul 24, 2017 | 11:09 AM EDT
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I'm working to get back on track after being on vacation, but it doesn't look like much has changed. What I find most striking is the level of conviction among many bears. They have been predicting a major market correction for a while, but they now seem convinced that it is going to occur very soon. I don't recall the bears at any time in recent years being as confident as they are right now.

The problem is that the market is still ignoring all the big-picture arguments. Arguments about valuations, politics and central banks are not having any impact yet. At some point, those things will matter, but until there is a shift in the price action, it is just wishful thinking by the pessimist.

In the early going, the Nasdaq 100 ETF (QQQ) is leading while the S&P 500 is lagging a bit. Small-caps (IWM) are holding steady. Breadth is running negative with about 2,700 gainers to 3,600 decliners. There are about 220 new 12-month highs.

While momentum is limited, there are some pockets of action. For example, the optical names are active with Applied Optoelectronics (AAOI) leading the way. My Stock of the Week, Lumentum (LITE) is in the same group and is setting up very well.

Another two stocks I've mentioned recently that are acting well are The Trade Desk (TTD) and Yatra Online (YTRA) . China names like Momo (MOMO) , Alibaba (BABA) and YY Inc. (YY) are also performing well.

It is a cliché, but it's a stock picker's market and the fact that so many bears are so confident is probably helping.

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