There Still Is a Bid Under the Market

 | Sep 12, 2017 | 11:02 AM EDT
  • Comment
  • Print Print
  • Print
Stock quotes in this article:














We have some follow-through to Monday's strong momentum, but it is being tempered by a rotation out of FAANG names, technology and biotechnology and into financials. The Nasdaq 100 ETF (QQQ) is lagging because of weakness in Apple (AAPL) , Alphabet (GOOGL) and some other big caps but the Russell 2000 ETF (IWM) is outperforming because of strength in small banks.

Financials are the largest group in the small-caps indices, which is why small-caps seem to be acting contrary to the broader market.

There continues to be a bid under the market as the dip buyers are still waiting for an opportunity to buy some weakness, but there is lackluster action in many of the stocks that were strong yesterday. That lack of sustained momentum is what is preventing this rally from really gaining some power.

Many bears are still trying to catch a top in this market, but it is still premature to press the short side. The indices need some lower lows before it makes sense to build up indices shorts. I'm holding an index short, but will not add anything to it until we see some significant red on the screen.

There are some individual stocks in the technology sector that are of interest, such as Extreme Networks (EXTR) , Ultra Clean (UCTT) and Himax (HIMX) . They are on my radar, but they aren't ripe for additions at this point.

Markets acting like this tend to stay sticky to the upside. There is a strong inclination to keep anticipating a reversal, but action like Monday's creates strong underlying support. You may not want to chase stocks here, but shorting them is probably an even worse idea.

Columnist Conversations

Equity futures were up slightly just before 9:30 PM Sunday night.
Spent a good amount of time with PayPal CEO Dan Schulman this week...and came away fully understanding why thi...
Has quietly taken a mini beating over the past few weeks. Might be worth a look on Monday given everything tha...



News Breaks

Powered by


Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.