Before the long weekend, market players were a little nervous over the possibility of an international event that might cause some market pressure on Monday. In particular, there was concern that some action might be taken against North Korea.
North Korea had a failed missile test and nothing much happened over the weekend, which set the stage for some buying this morning.
The indices were oversold after the dreary action last week, but the bounce we are seeing today is coming on light volume. Most European markets are closed for Easter Monday and that is cutting the level of action.
Breadth is running very solid, with about 4600 gainers to 1800 losers. However, we only have about 120 new highs, which is a function of the pullbacks last week. Small caps are lagging again, while the Nasdaq 100 is leading due to strength in Alphabet (GOOGL) , Amazon (AMZN) and other big-cap names.
Volume is light and much of the action is oversold bounces, so it is tough to have much confidence in the action. I like the action I'm seeing in Kornit Digital (KRNT) , which is a name I've mentioned several times in the past. Sarepta Therapeutics (SRPT) continues to bounce off recent lows and Fortinet (FTNT) is making another try as it comes off its 50-day simple moving average.
In this market, my game plan is to not trust that upside. There has been enough technical damage done lately that there is no reason to believe that we are going to see anything other than a limited bounce.
The indices are still holding support, but buyers do not look capable of delivering upside momentum at this point.