The indices, particularly the Dow Jones Industrial Average, are doing a good job of following through on Monday's strength. The momentum was a bit tepid yesterday and that is continuing Tuesday as the FAANG charts aren't moving much and the Nasdaq 100 ETF (QQQ) is close to flat. Breadth is OK with around 3,400 gainers to 2,650 lowers.
The S&P 500 is hovering near day highs as strength in oil is helping. There are some decent pockets of movement for stock-pickers as well. Stocks I've mentioned recently such as Stitch Fix (SFIX) , Casa Systems (CASA) , W&T Offshore (WTI) and Solaris Oilfield Infrastructure (SOI) are moving nicely but the high-momentum China names like iQIYI (IQ) and Bilibili (BILI) are not doing much.
My game plan so far today is to do some selling into strength as stocks become extended. Turtle Beach (HEAR) , which has been a favorite, gapped up on a buy recommendation and I took the opportunity to sell down. I also had an outsized position in CASA, which I reduced some into the early strength. Some of the small oils are extended as well.
The only problem I see in this market right now is that a few things are becoming extended and momentum isn't as sustained as I would like. The trend is clear but I can understand why Doug Kass is making an effort to call a short-term top. The action has been choppy and it wouldn't be hard for a sell program to scare up a little downside.
With earnings season fast approaching I expect to see some bids under this action so if you are taking some gains don't expect much downside before remounts develop.