The Nasdaq, small cap indices and many individual stocks like Amazon (AMZN) and Microsoft (MSFT) started the day with overbought technical conditions and that is producing some increased intraday volatility.
The DJIA, which has been a laggard, is leading and breadth is still pretty good with about 3650 gainers to 2900 decliners. There are over 400 new 12-month highs which illustrates how well momentum is working. However, there has been some sharp reversals after the gap-up opens. Both AMZN and MSFT are in the red after multiple day runs.
I'm not looking for a major market reversal to suddenly occur but I am concerned that we will see some consolidation and pullbacks as the recent strength is digested.
There is some concern about the level of complacency that seems to exist and you really have to wonder how the 'short volatility' trade could expand to the levels that existed in January, right before that trade blew up and caused a major market pullback.
My focus is on individual stocks and so far today I've been a new seller. I do see a few charts I like such as my ETF of the Year, ETFMG Alternative Harvest ETF (MJ) , and small biotech Coherus Biosciences (CHRS) .
I'm not finding much that is setup for entry but that doesn't mean the market is going to reverse. It may work off the overbought technical conditions by trading flat.
(Amazon and Microsoft are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells AMZN off MSFT? Learn more now.)
