Buy the dips, has become sell the rips.
Bear markets grind on you. They offer fantastic bounce opportunities, but if you pick the wrong sectors or the wrong stocks, it will wear you down.
Today's action has the potential to actually be very good. We had buying out of the gate, then momentum, small-cap, and aggressive growth names reversed. Now, if - and if is a big word - but if those names find a way to rally this afternoon, we could set up for a strong move higher on Friday. That might be all we need to get out of this funk for a few days. Looking at the Nasdaq, I would think it's good for a 2% to 4% move higher. Given the high beta names have been the ones getting sold hard, it should translate to bounces of 6% to 10%, possibly more, in individual names.
That would be a rip to sell though. And we'd need to see the proper setup today. Maybe that's too much to ask.
If you look at a heatmap today, things don't look bad at all. In fact, they appear quite good but the underlying action for traders remains horrid. I'm not sure how much more selling winners from 2020 can absorb in 2021. There are so many broken charts that without a V-shaped bounce, good fundamental results may continue to get aggressively sold. We are seeing many traders get trapped beneath these aggressive selloffs.
I continue to be patient. My few attempts at timing a bounce haven't paid off. The only thing I've done is picked up a few of the smaller names I like for the long-term as they've been beaten senseless. My focus there is on the business rather than the charts, so a few names like Juva Life (JUVAF) and Draganfly (DFLYF) are making their way into the buy column. The charts are atrocious. Their performance has been beyond disappointing, but nothing has fundamentally changed, so I'll average into these along with a few others, but I'm not going to watch them tick by tick as I have a year plus time frame in mind as they build out their business.