After the extremely poor action on Tuesday, there is a little rebound action this morning on about 2 to 1 positive breadth, but it is tentative and lacks energy so far. The longer it holds, the more likely some buyers will start to inch in and put some cash to work, but there is no fear of being left out at this point. The charts are a mess, the Fed is no longer our friend, and the indexes still need to correct more to bring them in line with the broader market.
I have a nice list of stocks that I like fundamentally that I want to buy, but we need better price action first. Fundamentals are not being rewarded in this market. In fact, if there is good news, it is an invitation to sell some on strength.
I do believe that quite a few stocks in groups like biotechnology and growth are close to solid support, but my methodology is to buy strength rather than weakness.
Many traders like to play the game of buying the bottom tick. It is understandable that they have that desire, but when you try to buy the low, then you almost always end up buying early because the only way to nail the low is to buy while stock is falling.
My view is that there is less risk if you wait to buy strength. You won't buy the absolute low, but if you buy right, then that is irrelevant.
I'm sitting on my hands waiting for better strength to buy.
