We have some rotation action to start the day that is being triggered by Alphabet Inc. (GOOGL) earnings and weakness in the dollar and bonds. Banks are the main beneficiaries, which I am playing with Financial Select Sector SPDR EFT (XLF) . There is a cup-and-handle setup there that looks attractive.
The negative reaction to GOOGL is causing some rotation out of technology. Biotechnology is also a bit weaker after a very strong run. Some retail is acting better, with Costco Wholesale Corp. (COST) being a good example. Core Sharkfolio holdings Health Insurance Innovations Inc. (HIIQ) and The Trade Desk Inc. (TTD) continue to act well. Stock of the Week, Lumentum Holdings Inc. LITE is bouncing back after a poor start.
The bears are going to seize on this action as another indication that a top is forming, but that is mainly wishful thinking. The action has been choppy lately and it continues to be choppy, but the overall trend is good and the underlying support remains in place. The inconsistency makes stock picking difficult, but that can be dealt with by good trade management.
I continue to look for new buying opportunities. Commercial Vehicle Group Inc. (CVGI) , Dynavax Technologies Corp. (DVAX) and PetIQ Inc. (PETQ) are two on my radar.
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This is the direction the yield on the 10-year treasury looks to be headed.
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