The Russell 2000 ETF (IWM) continues to exhibit surprising strength, but the senior indices are soft and breadth is running about 3,000 gainers to 3,500 decliners. Some of the big recent movers like Alphabet (GOOGL) and the biotechnology sector are taking a rest, but there aren't any strong indications that this is anything more than a rest at this point. (Russell 2000 ETF is part of TheStreet's Stocks Under $10 portfolio. Alphabet is part of the Action Alerts PLUS portfolio.)
We still have good momentum in places, with over 425 stocks hitting new highs. Names like Nvidia (NVDA) and AirGain (AIRG) continue to make strong moves and I'm seeing some interesting action again in small oil names like Resolute (REN) and Halcon Resources (HK) .
We are at that point in the market move where both bulls and bears are hoping for some weakness. The bears because they are tired of being squeezed and the bulls so they don't have to chase entry points. The dilemma for the bulls is that there are fewer entry points as things become increasingly overbought.
I've been selling down some positions into strength, which is what I do stylistically, but I am holding on to partial positions until they do something wrong. I want the price action to make the decisions for me, and so far it is telling me to just sit and wait. There is no real downside momentum at this point.
One new buy I made recently is BlackLine BL, which is a recent IPO underwritten by JPMorgan (JPM) and Goldman Sachs (GS) . BlackLine is essentially a cloud-based accounting and finance service. It should have initial coverage soon and is trading near its highs after pricing at $17 on Oct. 28.
Stock picking is going to be particularly important next week when traders look for the speculative action that often occurs around Thanksgiving. I know a number of traders are already scanning for low-float, low-priced stocks that may attract attention. It is a fun game if that is your style, but as you can see from what happened to bulk shippers, it can be very dangerous as well.