A combination of poor positioning for Brexit and the usual end-of-quarter games has caused volatility the last few days, but things are slowing down today. Many market players have already made their moves and now they are starting to wonder if we are due for consolidation.
Breadth is still positive and the indices are showing slight gains, but the inclination to chase is no longer as clear. There is likely to be volatility this afternoon as end-of-quarter rebalancing between bonds and equities occur but that is impossible to game.
I started a small position in the Direxion Daily Small Cap Bear 3X ETF (TZA ) as I'm looking for small-caps to give back some of the recent gains, but it isn't anything very aggressive. Metals have rolled over but I continue to believe that is a "go to" group as market conditions evolve.
I have a few small-caps like Magna International (MGA), Tesaro (TSRO) and Brightcove (BCOV) on the screens, but I'm focusing on protecting gains as I see little new to buy.
Keep in mind that we have a historic positive bias for the indices in front of the Independence Day holiday, but the Brexit drama may have undermined that to some degree. Quite often, there can be some good small-cap trading in front of a holiday, but stay selective.
Please note that due to factors including low market capitalization and/or insufficient public float, we consider BCOV to be a small-cap stock. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.