The indices are in positive territory and breadth is solid at close to 2 to 1 positive but it is a lazy day of action with some mixed action. The S&P 500 had its first four day loss of 2018 so it was slightly oversold and is holding at the 50-day.
The main strength today is in small caps. The Russell 2000 ETF (IWM) is leading and that is why we have the positive breadth. If the action was narrow and it was just the DJIA leading like yesterday it would be more worrisome but the small cap strength tells us that there is still a healthy speculative appetite. When its big cap leading then the action tends to be more driven by ETFs and trying to find some relative safety.
I see more red on my screens than I would like but I'm finding some buys of interest. Ocular Therapeutix (OCUL) was my technical buy from last night and that is performing very well. Xinyuan Real Estate (XIN) was a Stock of the Week that didn't work, but it is now turning up off a good base. Clearside BioMedical (CLSD) was a very hot secondary offering that failed to hold pricing. It is finally seeing some interest today after a steady selloff.
Right now this is a market for stock pickers and not timers. The indices aren't giving an edge right now and, as a result, you have pundits trying to make something out of nothing news. Let the action in your individual stocks determine your market bias.
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Markets appear to be pricing in a lot of bad short-term news for richly-valued companies such as Tesla, but perhaps not much risk related to potential longer-term macro headwinds.
For March and the first quarter, the RMPIA takes less of a hit than major indexes.
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