Bulls Take a Day Off

 | May 14, 2018 | 4:32 PM EDT
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Stock quotes in this article:

FB

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amzn

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aapl

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nflx

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googl

The indices cooled off after a hot start and closed the day just a little off the lows but it was routine consolidation after a good run. Plenty of individual stocks continue to act well but you can't blame traders for taking some gains after a big move off the intraday reversal on May 3.

Breadth went from 2 to 1 positive to slightly negative at the close but there were over 320 stocks making new 12-month highs while 72 hit new 12-month lows.

The winning sector on my screens was biotechnology as it built on Friday's spike following President Trump's decision on drug pricing. FAANG names -- Facebook (FB) , Amazon (AMZN) , Apple (AAPL) , Netflix (NFLX) and Alphabet (GOOGL) -- rolled over intraday. They are quite extended here and the appetite for chasing has been sated to some degree.

The biggest movers are the low-priced names. Small caps have been leading and when that happens, speculation in 'junk' names picks up. It makes for good trading and can last longer than some think reasonable but when the momentum ends it can be very abrupt.

Of course the bears will try hard to make something of the fact that the market colled a little today but it is probably more positive than negative. Some consolidation at this point is what is needed if the market is going to continue higher.

While the price action is still good, I am concerned about what news catalysts will keep things running. We are moving into a seasonally slower time of the year and with earnings and the trade issues largely behind us the market will be looking at the Fed. A couple of Fed members seem to be making hawkish comments but so far the market isn't paying much attention.

The bulls may have rested today but they are still in control of this market.

Have a good evening. I'll see you tomorrow.

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