The market is seeing some classic 'sell the news' action following four good earnings reports from Apple AAPL, Alphabet GOOGL, Facebook FB, and Amazon AMZN. Apple and Facebook are holding up fairly well but the good news has triggered selling in other areas of the market. Small caps (IWM) are lagging badly with a loss of 2.5%. That underperformance is reflected in breadth of about 1850 gainers to 5400 decliners. There are over 250 stocks at new 12-month highs today but few are at intraday highs.
The pockets of speculative action are still out there but are narrower. There is a rotation back into precious metals today but outside of the stocks that reported last night it is a sea of red.
My game plan here is to focus on managing existing positions and to stay selective with new buying. I'm still trying to pick off some quick trades in lower priced stocks but it is becoming more challenging with small caps acting poorly.
What is saving the market right now is the outperformance of the Nasdaq 100 (QQQ) which is up 0.35% but well off its opening highs. If the FATMAAN stocks continue to fade, I will be looking at this corrective action for the broader market to go deeper.
So far stock picking is still working but it is not as strong as it was.