The action this morning is similar to what we saw last Thursday. Futures were pointing to a fairly big gap-down open but the dip buyers showed up and helped to produce a flattish open. Rather than a purge that could setup a decent intraday bounce, the buying energy was expended and the indices rolled over.
The S&P 500 is taking out the opening lows. Breadth is still positive but is slipping very fast now. There just isn't much desire to chase even minor strength.
There is a little action in pot stocks in front of the Canadian legalization on October 17. Names such as Youngevity International (YGYI) , Canopy Growth (CGC) , Tilray (TLRY) and New Age Beverages (NBEV) are attracting traders but I've been a seller into the strength as I believe the October 17 date is likely to produce a 'sell the news' response.
Another group of interest today is gold (GLD) and gold mining. After a pause on Friday, gold is building on a strong move from last Thursday. The narrative for gold has finally improved as interest rates rise and the dollar weakens. Also, there is some very solid support on the chart now with as the August lows have held and several retests have been successful. Gold and gold miners can be choppy traders so some patience is generally required with the group. My Stock of the Week is gold miner Kirkland Lake Gold (KL) .
With Sears (SHLD) formally filing bankruptcy today, there is talk whether J.C. Penney (JCP) may be the next to collapse. JCP is in a little better shape and it made money in the last holiday season but this is a stock with a terrible chart and questionable financials.
It is likely that the ultimate death of JCP will be a long drawn out process and won't offer much returns for shorts unless they are very patient. There are probably better opportunities for shorts even if you believe JCP is a dead man walking.
I'm not doing too much right now as even the most oversold stocks are still struggling to bounce. We are becoming even more oversold and that is a good thing.