It is often said that the market always does what will frustrate the greatest number of people. That isn't always true but we have a pretty good example of it this morning.
The open wasn't weak enough to buy aggressive and it wasn't strong enough to invite selling. The dip buyers were busy early and by the time of the open most of the gap-down had evaporated. The market was still in negative territory so there wasn't any great desire to sell into the bounce and now we are drifting back up as the bears stand aside.
Overall breadth is running just about even, although for the first time in a while there are more new 12-month lows than 12-month highs. As I mentioned in my opening post, traders are looking to big-cap technology names as bounce candidates. Facebook (FB) , Amazon (AMZN) and Apple (AAPL) are in positive territory. (Facebook and Apple are holdings in TheStreet's Action Alerts PLUS portfolio; Amazon is part of the Growth Seeker portfolio.)
It is still very early and I am hesitant to even mention the chances of another V-shaped move. After the selloff Friday even the bulls would normally expect that a bounce wouldn't last but that dynamic has changed since the Great Recession. While that may not make technical sense it has become so common we have to keep it in mind.
My inclination is to cut back a few things into strength if I have an opportunity although I'm fairly content with what I have. The Lantheus Holdings (LNTH) buy from Friday is working and I'm leaning toward building positions in TPI Composites (TPIC) and Airgain (AIRG) on weakness but there's no rush.
One of the toughest trades in the market for a long time has been betting on downside follow-through. That is the case again today as stocks are hitting intraday highs as I write.
Fed member Lael Brainard, who has previously been very dovish is scheduled to speak at 1 p.m. ET. This is receiving more attention than usual because if she is hawkish it will influence the odds of a rate hike sooner rather than later.