The market action today is a great illustration of how difficult it is to try to predict market tops. After some weak action yesterday and increased concerns about the China trade deal, the indices looked like they were in position for at least a pause and maybe a deeper pullback.
The bears have been predicting a turn at any moment and they have had some good arguments but they did not see this better than expected jobs news coming this morning. Recent jobs reports have not been as robust but this morning's numbers were well above expectations even with the General Motors (GM) strike adding some pressure.
The fact that the indices are so buoyant on this news is an illustration of how much skepticism and fear there is. I can't remember a time when there has been so little euphoria as the S&P 500 makes new all-time highs. The bears often say that bulls are complacent but recently even the bulls seem more worried than joyful.
As the old saying does 'the trend is your friend' and that is the case now regardless of all the negative predictions. Our job is to try to find ways to make money and the best way to do that is to buy stocks that are going up.
Two stocks on my radar this morning are InMode (INMD) which has formed a high-level base and is showing some signs of pushing higher. This was recently my Stock of the Week and is looking very attractive as it consolidates.
A second stock I'm adding today is Endo International (ENDP) that develops generic drugs primarily for pain management. It trades with a trailing PE of just 2. The reason the stock is so cheap is that it has exposure to various opioid lawsuits. If a global settlement is reached with states on the opioid issue, the removal of the overhang will likely send ENDP sharply higher. No one knows when or if that might happen but the technical pattern of ENDP is favorable and I've added shares.