If the Indices Go Red Today, It Will Signal a Big Shift

 | Aug 11, 2016 | 10:48 AM EDT
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Stock quotes in this article:

baba

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ssri

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aosl

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acia

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yrd

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tpic

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quot

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TZA

We have a couple strong themes today -- and the indices are trading up -- but momentum is tepid and we have reversed off the highs. Breadth is running quite good, at around 2 to 1 positive, and we have strength in retail names and Alibaba  (BABA) , but it isn't igniting more-aggressive buying.

If the indices go red today, despite the good news, that will be a significant shift in market character. That sort of intraday reversal is a rare beast in this market, so it will be a signal of some issues. Individual stock action is still quite good, but this choppiness and thin trading is making it tough if you don't catch a move right away.

Outside of retail and BABA, there is a mix of action without any strong themes. There are some metals names, like Silver Standard Resources  (SSRI) , and chips, like Alpha & Omega Semiconductor  (AOSL) , but no real sector action -- other than retail.

Acacia Communications (ACIA) , which has been my biggest winner of the year, reports earnings tonight -- and obviously has sky high expectations. I'm going to hold a token amount and will look for new entries after the news is reported. Yirendai (YRD) and TPI Composites (TPIC) continue to act well.

One new stock on my radar today is Quotient Technology (QUOT) . That is a very interesting chart over the $13.60 area, especially if volume continues to run over 600,000.

As I discussed yesterday, I've adopted a more-cautious view of the market and am managing positions more tightly. I also have some Direxion Daily Small Cap Bear 3X ETF  (TZA) as a hedge, but am not rushing to add to it at this time.

Overall the index action is mediocre, while individual stock picking is offering some rewards.

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