One of the reasons traders root for action like we had yesterday is that it often leads to stronger emotions and greater volatility. Big moves should produce emotional reactions that make for trading opportunities.
Unfortunately, this market doesn't seem to generate much emotion. Greed and fear have been undermined by bloodless computers and methodical dip buyers. Over the past couple of years, we have often seen one big move and then an immediate trading range again.
That is what we have so far today. There isn't any downside follow-through, but the bounce is extremely weak. It is a very small trading range despite the biggest downside move of the year yesterday. Breadth isn't very good and small-caps are lagging, but there is no strong emotion or reaction.
Speaking of lack of emotion, the market no longer reacts to news of terrorism events like what took place in London today. Back in November 2015, the market initially sold off following the Paris concert attack but reversed sharply and closed positive. Since then there has not been any real market response to these attacks.
This action today isn't the sort of oversold bounce you might expect after the worst day of the year, but there never was any real panic. Financials are still weak and small-caps are an issue, but the big-cap names are holding us up.
A couple of my longer-term biotechnology holdings are acting well. I plan to add to Global Blood (GBT) and Sarepta (SRPT) at some point but haven't yet. I still don't have much new on my radar at this point, although things are developing.