It is all about rotation once again. The SPDR S&P 500 ETF (SPY) and the Dow Jones Industrial Average are inching higher, mainly due to strength in financials like Goldman Sachs (GS) and American Express (AXP) , while the Nasdaq and small-caps, like iShares Russell 2000 Index ETF (IWM) , are weaker on a selloff in biotechnology. Technology stocks are mixed and oil is still seeing some interest.
Comments by Donald Trump in a Time magazine article about drug pricing is the main catalyst for the selloff in biotechnology. The group was already weakening and this news accelerated the rotation into financials.
Technology names like former stocks of the week Western Digital (WDC) and NVIDA (NVDA) are helping the bullish cause. Chips are also higher and I'm looking for some additional entries in that group. Tower Semiconductor (TSEM) and Oclaro (OCLR) are on my radar.
I've mentioned the last couple days that gold and silver look promising for a bounce and we are seeing some good movement now in names such as Pan American Silver (PAAS) , First Majestic (AG) and Northern Dynasty Minerals (NAK) . The group has been fading later in the day so I'm looking for a strong close before making many additions.
I'm finding it increasingly difficult to make new buys and I'm hearing similar complaints from other traders. The indices still have positive momentum, but they are deceptive as the rotations under the surface are much more volatile than what we see in the major indices.