It was another slow start this morning, but that seems to be working for the market lately. The last two days, the market opened at the lows and then worked steadily higher the rest of the day. The psychology seems to be if the bears can't do better than this, then we might as well put some money to work. Waiting for a correction isn't helping the P&L very much.
Small-caps are leading and breadth is running about 2,900 gainers to 2,450 losers. There are only about 100 new 12-month highs, which indicate momentum is not that strong. While there is good underlying support there isn't much chasing.
One thing that is helping quite a bit is strength in the high-beta big-cap such as Amazon (AMZN) , Alphabet (GOOGL) and Netflix (NFLX) . Apple (AAPL) has been the main driver of outperformance for the Nasdaq, and I expect to see it continue to hold into the end of the quarter. (Alpahbet and Apple are part of Jim Cramer's Action Alerts PLUS charitable trust and Amazon is part of the Growth Seeker portfolio.)
Despite the strength I've remounted a small amount of ProShares UltraShort Russell2000 (TWM) . This was a good trading vehicle recently and I want to have it back on the radar. As I discussed in my article on "probing buys" last Saturday, it can help you be more aggressive when you establish a foothold in a stock. I'm not predicting a market collapse, but I'm going to be mentally ready to move fast in case there are some reversals. I'll be adding if the indices start testing intraday lows.
In an environment such as this one, my main focus is on finding stock picks that are working for shorter-term trades. An old Stock of the Week that is on my radar today is Kornit Digitial (KRNT) . The company has technology that allows for small-run textile printing. Amazon is a major customer and even has an equity interest in the stock. It is moving through resistance at $18 and now needs some decent volume.
Another old Stock of the Week on my radar today is Oclaro (OCLR) . The chart isn't perfect but it's improving and there has been some solid fundamental news. The optical sector has been very strong and it looks like OCLR is playing catch-up now.
The indices are hitting the highs of the day as I write and the action is looking very similar to what we've seen the last two day with a positive intraday trend. Don't be in a big rush to fight it.