The setup for some profit taking in front of the weekend was good but so far the selling is fairly mild. The monthly jobs report was much softer than expected but that isn't a major negative for the stock market which is always happy to keep a friendly Fed around for longer.
The main problem the market faces right now is that many stocks have enjoyed a good run and are a bit extended. Even some of the small-caps coming off recent lows have made sizable moves and could use some rest.
Breadth is running around 2 to 1 negative and new 12-month highs are about half of what they were yesterday.
I see a number of my favorites pulling back which I attributed primarily to just some repositioning in front of the long weekend. I'm looking at three names on weakness today: Urban-gro (UGRO) , Elys Game Technology (ELYS) , and Beyond Air (XAIR) . All three have fundamental stories that I find compelling and all three have recently spiked to highs on very good volume. They are now pulling back and struggling to find some support. They can easily go lower, especially if market conditions are poor, but ultimately the valuation will be recognized at some point. I find UGRO of particular interest given its high level of cash and valuation and am adding quite a bit as it hits intraday lows.
There are a few other names like these that are struggling right now but we are heading into some poor seasonality next week and I plan to move incrementally. I will be looking for charts that are setting up for good reactions to third quarter earnings that will start to hit in 5-6 weeks.
It is going to be a thin afternoon and with breadth running solidly red expect many traders to hit the exits early.