After two days of big gains there is some churning action as market player debate the potential of a pullback on news about President Trump's tax plan. The details slowly have been leaking out and there is a muted response so far.
While the tax proposals make for interesting and sensationalistic headlines, the market is focused on what actually can be passed and seems cautiously optimistic that there will be positive aspects to new tax policy even if it isn't the much-ballyhooed 15% rate.
As I discussed in my opening post, the "sell the news" trade is a tough one for the bears and I don't expect it to work very well. Indeed, it is likely that the dip buyers would be quick to jump in if there is some "sell the news" pressure.
I'm maintaining a bullish bias and will be looking for buys, but I am managing positions carefully and trying not to let things slip. I was stopped out of positions in the optical sector, which has been acting poorly, but am making up some ground as biotechnology names such as TG Therapeutics (TGTX) , which I mentioned yesterday, and Cancer Genetics (CGIX) , my Stock of the Week, continue to act well.
One other small biotechnology name that is of interest is Antares Pharmaceuticals (ATRS) . I'm building a position in that as it moves to new highs on good volume. (Antares is part of the Stocks Under $10 portfolio.)
After the big move of the last couple days, the key now is to watch for charts to develop as some pullbacks occur. If you are looking for lower-risk entry points, they should start to setup in the context of an uptrend once the euphoria cools off. The chasers have been loading up the last couple days, but now is the time for the more strategic traders to watch for entries.
We'll see what happens on the tax policy this afternoon, but if we sell off I'm likely going to be a buyer.