Breadth is running positive and we are still seeing some signs of underlying support in this market, but the problem is that there isn't enough upside power to justify aggressive buying. Even if you aren't a momentum trader, you need some follow-through to the upside to make buys worthwhile. Too often in a tape like this, a buy will just sit there and do nothing.
One of the most notable things about the market right now is how many stocks have suffered very sharp drops in a short amount of time. Tesla (TSLA), Cliffs Natural Resources (CLF), Silver Wheaton (SLW), Teck Resources (TCK) and quite a few mining stocks have dropped 20% or more from recent highs. It is not evident in the indices as we have rotated into other names like Facebook (FB) and Amazon (AMZN), but there is a rolling correction under the surface. (Facebook is part of TheStreet's Action Alerts PLUS portfolio. Amazon is part of the Growth Seeker portfolio.)
The S&P 500 is working back to the opening highs, but I'm annoyed with this market and the limited opportunity it is offering. I have a few things that are inching up slowly, but the opportunities to deploy idle capital are very limited.
The fact that the indices are still holding up is giving the bulls something positive to focus on, but the very limited stock picking is preventing more positive sentiment. This market demands that we stay selective, but that is even harder when there are so few stocks offering entry points.
The bulls are holding us up, but that is all they are doing.