We have a routine oversold bounce this morning and it isn't particularly lively.
Big-cap names like Apple (AAPL), Priceline (PCLN) and Google (GOOG) are leading, while small-caps and secondary stocks are doing little. Breadth is decent with about 3350 gainers to 1550 decliners, but there's no major momentum. Retail and chips are leading while precious metals and solar energy lag.
Though Tuesday's action produced plenty of red, many stocks are still extended and don't offer compelling entry points. We are in the middle area where momentum players are moving to the sidelines, but it's still too high for value buyers to take interest. Some of the worst air pockets in the market occur when momentum buyers exit and support disappears. That is the big risk now.
I'm developing a watch list of stocks I'm interested in on pullbacks, and I will stick my toe in at times, but I'm not feeling confident that we have good support levels.
In fact, I'm looking for the bears to sell into the bounce fast.
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