The pattern of the market recently is that morning weakness leads to afternoon strength. While there have been consistent rebounds, that is all they are. They don't continue for long and the same pattern plays out again in the next few days when the market dips in the morning.
The other notable pattern in this market is that a few big-caps are helping to hold the indices aloft. Today Apple (AAPL) and Amazon (AMZN) are doing the heavy lifting. The gains in these two stocks offset the losses in hundreds, if not thousands, of smaller-caps.
The indices overstate the market strength but it's the indices that most people consider to be "the market." There has been a stealth correction in this market to some degree, but the indices are preventing sentiment from shifting very much.
My game plan continues to be to focus on individual stock picking while waiting for greater clarity in which way the indices will break. I have a bearish bias as far as the indices and small-caps in particular, but I'm waiting to press my bets. The pattern of consistent dip buyers has to change before it will pay to be more aggressively bearish.
As far as stock picking goes, I've added to Health Innovations (HIIQ) , which was a recent big winner as Stock of the Week. It has consolidated a bit and looks like it could produce another leg up.
A new name I started today is The Trade Desk (TTD) . TTD is a platform that allows buyers of advertising to manage their digital campaigns. It had a good quarter and gapped up this morning. The theme looks like one that could gain traction longer term. My methodology for a stock like this is to establish a toehold and then build a position as it develops. I will look to buy either on pullbacks or strength. It will depend on the action, but I'm in and it is on the radar.
Earlier this week, I discussed playing Nova Measuring (NVMI) in the same way I'm playing TTD. NVMI never gave an opportunity to add much on pullbacks, but it goes to show how chasing a gap on good earnings can work.
Cocktails & Cramer
Join Jim Cramer on May 23 for an exclusive party at Bar San Miguel, his Brooklyn tavern.
You'll get to watch a screening of Mad Money, after which Jim will arrive fresh off the CNBC set to mingle, pose for photos and answer your investing questions.
Participants will enjoy dinner, drinks, an autographed copy of Jim's book Get Rich Carefully and a free one-year membership to Action Alerts PLUS, Cramer's VIP club for investors. (Current AAP members will receive one extra year of membership for free.)
When: Tuesday, May 23, 6-9 p.m. EDT
Where: Bar San Miguel, 307 Smith St., Brooklyn, N.Y.
Cost: $375 per person
Space is very limited, so click here to reserve your ticket to this exclusive event today.