Sustained momentum has been the big issue in this market lately, but so far, the market is holding on to yesterday's gains fairly well. Small-caps, as evidenced by the Russell 2000 ETF (IWM) , are lagging but the senior indices are holding, although breadth is negative. A bounce in retailers is helping a bit and the opticals are leading the technology sector.
While it a powerhouse follow-through move, it qualifies as consolidation and is the sort of action that provides a good foundation going into earnings reports next week. From a trading standpoint, the nice thing about earnings season is that it benefits stock pickers. There will be some standout movers and some good opportunities if you can catch the key names.
I am optimistic about the action I'm seeing in a number of stocks that I've been discussing. Lumentum (LITE) , Everspin (MRAM) , Health Innovations (HIIQ) , ShiftPixy (PIXY) , Nutanix (NTNX) , Oclaro (OCLR) , Alibaba (BABA) and ShotSpotter (SSTI) are all acting well and are attractive going into earnings down the road.
My main measure of market strength is the action I see in individual stocks, and right now it is looking pretty good.
I am long some SPDR Select Sector Financial ETF (XLF) into reports tomorrow from Wells Fargo (WFC) , Citibank (C) and JPMorgan (JPM) . I suspect that the group will continue to be of interest as the central banks slowly raise rates further. (Wells Fargo and Citigroup are part of TheStreet's Action Alerts PLUS portfolio.)
