It is another messy day of action with the indices doing a poor job of indicating what is really going on. The DJIA is in positive territory again and the FAANG names are keeping the Nasdaq 100 ETF (QQQ) in positive territory. Strength in Apple (AAPL) , Intel (INTC) , Nvidia (NVDA) and a few other bigger cap names is giving the market an appearance of being stable
The big negative is the continued weakness in small caps and the majority of stocks. Breadth is running about 2600 gainers to 4200 decliners and once again the number of new 12-month lows exceeds new highs. Right now there around 150 new lows versus 63 new highs.
If you want a more accurate picture take a look at the Russell 2000 ETF (IWM) . It is taking out support levels and is looking to test lows hit in July. There is very little support on that chart. Until that pattern shifts it is going to be dangerous for individual stock pickers.
I see a number of stocks that are getting beat up like Sarepta (SRPT) , Turtle Beach (HEAR) and PetIQ (PETQ) that I am interested in accumulating. I have small positions now so that I don't lose track of them but there is no rush to add. I have been adding one of my small cap favorites, HTG Molecular (HTGM) , but I'm not doing anything major.
Blue chip name PepisCo (PEP) is a good example of the weak action in individual stocks. The company beat estimates slightly but also cut guidance a little. In the current environment that sort of report is not going to motivate buyers even if they are looking for a steady performer. PEP trades with a PE of 20 and is growing EPS at around 6-7%. That isn't outrageously expensive but it isn't compelling either. It may be an okay place to park some funds but it probably isn't going anywhere soon.
There are far too many individual stocks acting poorly right now so there isn't much choice but to be patient and wait for it play out. Eventually this will lead to some better setups but if you are too aggressive too early the risk of being shaken out is very high.