It is a very odd mix of action today and whether it's bullish or bearish depends on what you are looking at. The charts of the major indices still look quite good.
The bulls will tell us that the Nasdaq is leading, but all the major indices are still holding key support and have been consolidating quite nicely. Big-cap names continue to outperform and there are some good pockets of momentum to be found. The takeovers in the biotechnology sector have helped sentiment, and there is still speculative money out there chasing some junk like 3D Systems (DDD) , Exact Sciences (EXAS) and SCYENEXIS (SCYX) . The main theme is biotechnology, but there are a few other names moving.
The bears will tell us that breadth is better but still running solidly in the red with about 2,800 gainers to 3,850 decliners. It is a narrow market that is holding up primarily due to chasing of a small group of big-caps. The main issue for the indices is that momentum is slowing. While they are holding up the leaders are not leading. Maybe it will broaden out again as earning season starts, but there seem to be quite a few folks looking for a roll-over to pick up some steam.
I'm not a big growling grizzly, but I do not like the narrowness of the market, the under-performance by small-caps and the lack of better technical setups. I'm still making some long buys, but my trust levels are low.
One stock on my radar today is Ultra Clean Holdings (UCTT) . The company raised its guidance substantially this morning causing it to break out of a six-week-long base. With the new numbers it appears to still be fairly cheap, and I've started to average into a position.
I'd like to be more optimistic, but I'm not feeling it. I want to manage trades very closely and be ready to hit the eject button if the underlying action doesn't start to improve.
