The indices are close to flat and breadth is around even, but there is some rotational action under the surface again. This time it is oil, steel and financials that are seeing some pressure while the FANG names and chipmakers are outperforming.
Stock picking is becoming more challenging as the groups with the strongest recent momentum start to fade, and market players are more selective with entries in different names. The indices are still looking very healthy, but the rotational action can take a toll if you are not careful.
I've cut back most of my oils, steels and biotechnology names and am looking harder at chips stocks now. I've reentered Advanced Micro Devices (AMD) on news of a possible deal with Intel (INTC) . Another chip name that is a Shark Technical Buy is Tower Semiconductor (TSEM) . I'll be digging further into the chip sector as the day progresses.
I don't tend to be a bottom fisher, but I am becoming increasingly intrigued by the possibility of a bottom in precious metals. Gold (GLD) and Silver (SLV) have been finding some support, and silver is actually starting to turn up a little. I have positions in silver miners Pan American Silver (PAAS) and First Majestic Silver (AG) , and will continue to inch into the names slowly. Gold is not seeing any accumulation now, but I'll be looking at some of those with volume increases on a bounce.
My Stock of the Week, Netflix (NFLX) is acting much better, and I feel good about the potential there into the end of the year. NFLX is now more a play on content rather than delivery, which many of the critics seem to miss.
This market is demanding that we be much more selective with our stock picking now. The strong momentum moves are slowing down and there aren't many new names stepping up to take their place.