We have a sluggish start to an eventful week, with breadth solidly negative, with about 2100 gainers to 4500 decliners. New 12-month highs are down to around 500, but most surprising is a jump in new 12-month lows to 150 or sol.
The dip buyers are still active and have the Russell 2000 ETF (IWM) back in positive territory, but weakness in semiconductors is keeping the Nasdaq 100 in negative territory. Biotechnology continues to be a key momentum group.
The FAANG names -- -- Action Alerts PLUS holdings Facebook (FB) and Apple (AAPL) , Trifecta Stocks name Amazon (AMZN) , Netflix (NFLX) and Google parent Alphabet (GOOGL) -- are holding up well, with the exceptions of Apple and Facebook, which are dealing with news issues.
The biggest issue this market faces is that the indices and many stocks are extended and in need of rest. The strong momentum has offset the overbought conditions so far, but it is becoming more difficult, especially after the frothy action on poor breadth that we had on Friday.
My key market timing indication is my P&L and the action in individual stocks. There are a few things pulling back today, but it looks more like consolidation after a good run, rather than a rush for the exits. There are plenty of stocks that I'd be happy to buy on weakness at this point. The biotechnology action continues to look very healthy.
Twitter (TWTR) has some strong momentum, but it's mainly biotechnology names like Sangamo (SGMO) , Global Blood (GBT) and Denali (DNLI) that are showing up. My Stock of the Week, Iovance Biotherapeutics (IOVA) , is working on a high-level base.
Technically, what we have to watch for today is a weak close. There are intraday lows hitting as I write, and breadth is the worst in a while, so there is some need for caution. But this market is badly in need of a rest, and it would be a longer-term positive if the overbought conditions are alleviated.
