The indices are chopping around and doing nothing while breadth started off quite strong at better than 2 to 1 positive and is now fading. We have 162 stocks making new 12-month highs, which is helpful for stock pickers but it's sloppy action, with momentum stalling out quickly in a number of cases.
Several stocks I've discussed recently including Sarepta (SRPT) , TPI Composites (TPIC) , Contol4 (CTRL) and Yirendai (YRD) are strong in the early going, but I'm concerned that they can build further momentum. I've reduced a number of positions and cleared out some smaller names like Etsy (ETSY) .
I often discuss how price action should be your ultimate guide and sometimes that means looking at subtler clues rather than just obvious breakouts and breakdowns. Selling into strength can be a great strategic move when the market starts to exhibit signs that momentum is stalling.We are seeing lower lows in the indices as I write, and selling in some recent favorites like Energy Recovery ( ERII) and Global Blood ( GBT) is picking up. I'll be looking for new entries, but I'm being a bit more defensive and protecting gains this morning.