The poor breadth we have seen recently is intensifying today. There are 1800 stocks advancing to 5300 that are declining, and new 12-month highs have declined to around 120.
Within those new 12-month highs are two names that are covering up the misery in the Russell 2000 ETF (IWM) . Those two stocks are Apple (AAPL) and Tesla (TSLA) which seem to have become automatic buys in front of their upcoming splits. Apple's strength alone offsets weak action in almost the entire Russell 2000.
This makes for an extremely difficult trading environment. If you aren't in Apple or Tesla there isn't much working to the upside and you can't short the indices because they are still up. Stock picking has become quite difficult and there is much grumbling with the small caps in a downtrend of almost two weeks now.
The big question is how does this action resolve itself? Do Apple and Tesla reverse and cause the senior indices to finally correct or do the secondary stocks find support and turn back up? Right now there is no rotation out of big cap growth and that is what complicated matters.
I'm working hard to manage positions and not doing too much new buying. I am watching the cannabis sector closely. There were some good reports there and some solid numbers but the sector is being sold. I'm inclined to do a little 'fishing' in names like Turlieve (TCNNF) , Curaleaf (CURLF) , and Green Thumb (GTBIF) , but I am in no hurry. Another name I'm looking at after good earnings is Cresco Labs (CRLBF) .
This is a very tough trading environment right now but that is the nature of the beast at times.