Stock Picking Is Getting Tough

 | Aug 03, 2017 | 10:56 AM EDT
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There are a number of stocks with good responses to earnings this morning. Tesla (TSLA) , (STMP) , Ubiquiti Networks (UBNT) , SolarEdge Technologies (SEDG) and Health Insurance Innovations (HIIQ) are all trading strongly but the indices are lackluster and breadth is sluggish again, with about 2,700 gainers to 3,400 decliners.

The list of stocks hitting new 12-month highs is down to around 150 so far today, which illustrates how limited the momentum is. I don't have the stats, but I bet that it is very unusual to have that number at such a low level when the DJIA has been going straight up for eight days in a row to new all-time highs.

Stock picking lately has been tough, as so many stocks have failed to rally after good earnings reports, but what makes it even more difficult is that the indices refuse to correct. The Russell 2000 ETF (IWM) has been lagging, but the other indices keep finding enough dip-buying support to hold steady. As I discussed in my opening post, the S&P 500 has barely budged on a closing basis for 11 straight days now. That sure doesn't offer much opportunity for market timers.

Because of the poor reaction to earnings and mediocre action in individual stocks, I am leaning bearish, but still looking for opportunities. I have not put much money to work recentl,y but I have a growing list of names that I am watching for technical setups.

One name I've been watching since a good report in the first quarter is The Trade Desk (TTD) . It has been doing a nice job of holding support at the 50-day simple moving average and is showing some signs of life into its next report, which is due out on Aug. 10. TTD helps businesses manage online advertising -- and after the results from Action Alerts PLUS  holding Facebook (FB) , it is likely that they will have another robust quarter.

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