In recent years, dips on Monday morning generated almost automatically buying. It didn't matter much what the reason was for the weakness, we could always count on the dip buyers to do their thing.
In large part, the reflexive buying was due to the confidence created by central bankers. If a selloff happened, it just created greater certainty that the bankers would come to the rescue once again.
But there is greater hesitation among the dip buyers in this market. They aren't nearly as sanguine now and are actually worried about Deutsche Bank (DB) and home sales. A bounce in oil also isn't helping and strong bonds reflects the increased nervousness.
Underlying all the normal market drivers is tonight's presidential debate. The rhetoric over how Donald Trump is not market friendly is heating up as the polls tighten and people wonder how things will play out tonight. If the market is looking for a reason to correct, election worries are a convenient excuse.
I tend to believe any selling on the election would create the same kind of opportunity that selling on the Brexit vote did but it is far too early for that to be a tradable thesis. We just have to wait to see if that develops.
I've taken a few stops on positions on this morning's weakness but there are several names on my screen I continue to like. Sarepta Therapeutics (SRPT) , which I discussed this weekend is moving on positive comments in Barron's. Control4 (CTRL) is seeing good follow through, Energy Recovery (ERII) is bouncing back on good coverage and Gold Resources (GORO) is my top gold pick.
This week's Stock of the Week, Weibo (WB) , bounced back from early weakness but needs to move over $50 to attract interest. I'm also looking to add TPI Composites (TPIC) on weakness, but I'll be patient.
If the indices don't hold early lows it will be a major technical issue but the selling seems to be slowing.