It is a quiet day for the markets but there is still a positive bias and a feeling of complacency. Breadth is running better than 4 to 3 positive and there are now over 400 stocks hitting new 12-month highs. There is nothing in the price action to indicate that a change in market character is developing. Some technically inclined folks keep telling us that the indices are overbought and extended but that sort of superficial analysis doesn't work too well.
One of the bears favorite contrary indicators is the stupid trading in speculative junk. There is definitely an increase in this sort of retail speculation and is probably due in part to bored sports gamblers with nothing else to do. But trying to use this behavior as a contrary indicator is just a form of data mining by hopeful pessimists that are desperate for a market reversal.
The speculative trading actually provides good market support simply because it illustrates that there is plenty of liquidity out there. You need cash to trade the junk names and there doesn't seem to be any shortage of it right now. When liquidity tightens there will be a change in this action but so far there are no signs of it. In fact, the success of speculative trading off the March lows only makes it more likely that it will continue.
I'm doing a little repositioning today just as a matter of discipline. For example, Personalis (PSNL) was one of my top picks from the year. It has moved from around $4 in March to over $20 today. It is announcing earnings after the close on Thursday. While I believe it will have a solid report, I think it is likely they will do a secondary offering as well. I'm looking to lock in some gains and look for reentry - either higher or lower - after the report.
Another stock that I'm holding that has earnings soon is Trulieve Cannabis (TCNNF) . They are scheduled to announce on August 12 before the market open. The company has been doing quite well and robust earnings are expected. I'm letting it ride for now but may reduce before the report if it runs up further.
Overall market conditions remain quite good and I'll be looking for further buys this afternoon.