August has been a pretty good month for the market so far, but we're starting to see more typical summer trading now. There's still a positive bias, but it's much slower and there's a narrowing in the market's strength.
Small caps are outperforming today after lagging yesterday, while breadth is running very solid as advancers lead decliners by better than 2-to-1. We also have more than 200 stocks hitting new 12-month highs so far today.
There's nothing wrong with this action, but it illustrates my point once again about how strong markets don't just suddenly fall apart -- they stay sticky to the upside. There are plenty of dip buyers driven by the fear of missing out, and when we have so much speculative action working stocks higher, why try to fight it?
Momentum names like Acacia (ACIA) , Weibo (WB) , TPI Composites (TPIC) and Yirendai (YRD) are still attracting plenty of interest from traders. Recent IPO AirGain (AIRG) , which I discussed yesterday, is also moving well.
I've started a position in Vonage (VG) that I'll discuss later, but suffice to say that I like the way the stock's chart is developing. However, VG needs to hold above $6 a share to start generating some momentum (it's currently at about $6.33). Also check out Anders Keitz's latest Vonage coverage here.
All in all, the market is slow today -- but August tends to have more volatility than we've seen recently, so stay vigilant. In the meantime, I'm continuing to hunt for some new buys in what's a good market for stock pickers.