Based on the movement in the S&P 500 ETF (SPY) , the market barely has a pulse. For the ninth straight day, the index is close to flat and the trading range is extremely narrow.
There is a bit more movement elsewhere, but it has not been very buoyant. Neither the health care passage yesterday nor the better-than-expected payroll numbers today produced much movement. We do have some dip-buying interest after the gap-up open was sold, but it is sedate.
One bright spot today is that breadth is better, with about 3,900 gainers to 2,650 decliners, and there is relative strength in the small-caps. It looks like some funds are rotating back in the more speculative small-caps and out of the big-cap Nasdaq 100 names.
The key to dealing with this action is careful stock selection. There isn't much opportunity in market timing right now, especially with the S&P 500 barely moving, but there are some pockets of action. A number of stocks like Shake Shack (SHAK) and Impinj (PI) reversed sharply after initial negative reactions.
Old favorite Applied Optoelectronics (AAOI) , which has been struggling with the optical sector, sprung back to life following a strong report and good guidance. Several analysts have raised their targets substantially, with Raymond James setting a $100 price. The stock trades with a trailing P/E of just 19 and is expected to grow earnings 194% this year. This stock is a play on the growth in data centers and has some shorts to squeeze as well.
My Stock of the Week, Health Innovations (HIIQ) , is building on yesterday's big move and also has positive analyst comments. Canaccord reiterated its buy rating and $28 target and Raymond James mentions that the stock may be added to the Russell indices next month.
A new stock on my radar is Lantheus Holdings (LNTH) . The company posted 87% growth in EPS to 28 cents in its most recent quarter and popped higher, but it used the move to price a secondary offering at $13.80. The stock is trading around that level and I'm looking for that to be strong technical support.
The overall indices aren't looking too hot, but there is opportunity for stock pickers.