Why I Feel Bearish About the Market

I'm not inclined to make market calls, but the action on my screen is pushing me to a defensive stance.
Stocks quotes in this article: YRD, ACIA, DRD, TZA, PRGO, X, SPWR, LLY, MYGN

The indices are holding steady this morning but the action in individual stocks is a bit troubling. We have weakness in a number of big-caps, including Perrigo (PRGO) , U.S. Steel (X) , SunPower (SPWR) , Eli Lilly (LLY) and Myriad Genetics (MYGN) .

Breadth is still slightly positive and there are over 300 new highs so far, but I see quite a few reversals and few stocks pushing to intraday highs. Biotechnology is under pressure and precious metals are leading, which is not a great combo.

I am not inclined to make market calls but there are times when the action on my screen pushes me to shift to a more defensive stance. This is one of those times. It has been a good run off the Brexit panic but I'm seeing a little more choppiness and finding it harder to make progress, despite big moves in individual stocks on earnings. With earnings coming to an end this week, the lack of catalysts may take a toll.

Two of my biggest winners, Yirendai (YRD) and Acacia Communications (ACIA) , continue to hit new highs but my positions in these are now quite small. I'll be looking to add back, but I'm not willing to chase.

I've added a little to a position in gold miner DRD Gold (DRD) and have taken some Direxion Small Cap Bear 3x (TZA) but, overall, I'm a net seller looking to keep my accounts close to all-time highs.

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At the time of publication, James "Rev Shark" DePorre was long YRD, ACIA, DRD, TZA, although positions may change at any time.

TAGS: Investing | U.S. Equity | Markets | Stocks

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