Conditions were ripe for an oversold bounce, but so far it has been an anemic attempt. Breadth is negative again, the indices are barely in the green and we have more new lows than new highs. It isn't the sort of dip-buying energy that has saved this market so often.
I don't want to be too negative too fast, as sometimes the bounces can be quite slow to start, but the lack of energy so far isn't very inspiring. As I've mentioned, a bounce attempt is going to give us some strong clues about the health of this market. It will tell us whether there are stuck bulls looking to escape or opportunistic buyers looking to catch a recovery. Right now there doesn't seem to be much concern about missing a snap back.
One bright spot continues to be biotechnology. Our top picks at SharkInveting.com, Global Blood (GBT) and Aurinia Pharmaceuticals (AUPH) , continue to blast higher. Kite Pharmaceuticals (KITE) is looking solid and I am keeping an eye on Aratana Therapeutics (PETX) for a possible bottom. Sarepta Therapeutics (SRPT) is another biotech name I'm looking to add to on support. Unfortunately, there isn't much of interest outside the biotechnology group.
The S&P 500 is hitting lows of the day as I write, which is not a good technical sign. We need the pattern of afternoon strength to return for this market to get back on its feet. Another close at the lows is going to put extreme pressure on this uptrend.
Honor your stops and stay very selective with new buys. A few things are working but they need to be managed carefully.