In view of the size and speed of the moves following the Trump election, it was inevitable that things would overshoot and we'd see some reversals. That is what is occurring today.
Financials, biotechnology and infrastructure plays are weaker, while the big-cap FANG names -- Action Alerts PLUS holding Facebook (FB) , Growth Seeker name Amazon.com (AMZN) , Netflix (NFLX) and Alphabet (GOOGL) -- are finally bouncing.
There is still much chaos under the surface as bulk shippers like DryShips (DRYS) , Seanergy Maritime (SHIP) and Euroseas (ESEA) are going nuts. There are some vague justifications for the move, but mainly it is just hysteria, much like what happened with intranet stocks in 2000.
Small oil stocks are looking interesting and I have a few on the radar, including Halcon Resources (HK) and Whiting Petroleum (WLL) .
Technology stocks have lagged during this run, and I'm now seeing better action in names like NVIDIA (NVDA) , Oclaro (OCLR) and, my Stock of the Week, Twilio (TWLO) .
Small caps are still extended, and if there are reversals there it will complicate some of the trades, but the focus should be on sectors. Right now, I'm looking to oils and technologies, as money rotates out of biotechnology and financials.
The indices are doing a very poor job of indicating what is going on out there. We have some major sector swings and that should be the focus.
