We have a quiet battle this morning, with profit takers and anxious bears looking for a pullback on one side and underinvested bulls trying to add some long exposure on the other side.
So far, they have things at a standstill, with breadth somewhat to the downside but few signs of any aggressive selling.
If we take out the early lows it should trigger some stops as folks lock in gains, but there is going to be plenty of dip-buying interest to lend support. Lots of folks want in after this giant move and the are likely to be a bit impatient as they are tired of missing out.
One thing of interest this morning is that I'm seeing life in speculative junk names, especially low-priced China stocks. Some folks may dismiss that as a sign of froth, but it makes me optimistic that the hot-money boys may be more active into the end of the year. It has been a while we have had any very strong themes or pockets of momentum. There has been a lot of general strength, but little that stands out as being driven by the mo-mo players. I'll be watching for that theme to develop further.
A few of my favorites like Web.com (WWWW) and Flotek Industries (FTK) continue to show signs of momentum, but overall its very quiet action so far. I'm looking for light-volume pullbacks as entry points, but will be willing to chase some strong volume movers if they aren't too extended.
I don't believe the buyers are going to go away too quickly.