The opening strength is generating some selling now, but the indices are still in positive territory and breadth is very strong with about 3,700 gainers to 2,500 decliners. Financials are leading and there is also some strength in oil. Biotechnology looked very poor on Friday and is selling a big bounce today. Apple Inc. (AAPL) is doing some heavy lifting but the other FANG names are relatively weak today.
I suspect that the next market reversal will be produced by an intraday turn in the indices rather than by a gap down. The last few pullbacks of any size occurred after a strong start and then a reversal on no obvious news. That is what I'm looking for to signal a change in market character. When the dip buyers disappear intraday, then the action finally can shift.
Last week there were a couple closes near the lows of the day, but they were minor and the bears couldn't do anything with that ammunition. The price action is still quite strong, but if the indices go red today and close weak then look for the calls of a market top to grow louder.
My inventory levels have gotten quite low recently as I continue to take profits into strength but have a hard time finding much that I can buy in size.
I added a little today to existing positions in Sarepta Therapeutics Inc. (SRPT) and Phoenix New Media Ltd. (FENG) . Sharkfolio holding Jupai Holdings Ltd. (JP) continues to act very well and Nutanix Inc. (NTNX) finally is holding on a breakout move.
With the indices back close to flat once again there isn't much volatility to create new opportunities. A strong intraday reversal would cause some pain, but it sure would shake things up nicely.
