For the past week or so I have been complaining about the lack of favorable chart setups. The indices have been acting well and breadth was good but I didn't see much movement in individual stocks that I could embrace.
The character of the price action made a substantial shift today and suddenly those charts that have been struggling are starting to work. It is a good illustration of how the indices really don't provide very good insight into the overall market action.
Today the action is driven more by stock picking with names like Netflix (NFLX) , Twitter (TWTR) and GW Pharmaceuticals (GWPH) acting as leadership. Market players are driven to look for entries in other stocks that have pulled back and have been lagging lately. Those chart that are coming off recent lows are now looking much better.
At this juncture the indices start to look a big extended while many stocks still have room to run before they become overbought. We still only have about 200 stocks that are hitting new 12-month highs which shows you how far the market has corrected recently. If the indices had been closer to the highs we would have had 100's of more new highs.
So the game plan here is to spot the charts that have more room to run. In my prior post I listed a number of stocks that are acting well and I'm inclined to add to some of those position. There is also some strength ins small-cap biotechnology names like Clearside Biomedical (CLSD) and Sangamo Therapeutics (SGMO) which I'm inclined to chase.
If you are a stock picker this is now the market for you.