Friday's breakout move has failed to ignite much excitement in the indices this morning, but breadth is solid and small-caps continue to outperform. The large-cap FANG names are lagging, but there continues to be some pockets of action in individual stocks.
One strong tendency of the market lately has been early weakness leading to some dip buying in mid-morning. There are plenty of signs that underlying support remains quite strong, although the action is sluggish. It is a Monday in August, so it isn't too surprising if participation is relatively light.
The key to navigating this sort of action is not to focus too much on the indices -- and the constant calls of tops by the bulls -- but to look for action in individual names.
Biotechnology has been a favorite of traders lately, but it is weak today. There are some oil-related names on the scans, like Encana (ECA) and Petrobras (PBR) , but it is pretty random leadership, otherwise.
Recent Stock of the Week, Splunk (SPLK) is showing life again, and I'm interested in adding back to that position. Other recent favorites, like TPI Composites (TPIC) and Oclaro (OCLR) aren't doing much.
One small-cap name on the day-trading list this morning is Cemtrex (CETX) . The stock is trying to take out recent highs over $6, and is attracting interest due to its volume.
The best trading is generally a function of a high level of emotions, which we are missing today. The SPDR S&P 500 ETF (SPY) is taking out the intraday lows as I write, and that is pushing traders back to the sidelines -- for now.
Please note that due to factors including low market capitalization and/or insufficient public float, we consider CETX 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.