For a while now market players have been looking for an excuse for corrective action.
Some thought that completion of the phase-one U.S.-China trade deal would produce a "sell the news" reaction but just the opposite occurred.
Some thought that the start of a new year would produce some selling and others were looking for earnings season to be a negative catalyst.
What wasn't anticipated was a deadly virus in China that is quickly spreading. Asian markets suffered some of their worst action in a while and U.S. markets are down in trading early Thursday morning as those fears bubble up.
In the early going breadth is running worse than three to one negative but our old friends, the dip buyers, are waking up and have the indices well off the early lows.
What we have to watch for now is a retest of those lows. Are those dip buyers just flippers looking for quick gains or will they stick around?
While the indices and many stocks look quite extended, I see plenty of charts that still look good. Some of the names I'm holding are Apellis Pharmaceuticals (APLS) , AudioCodes (AUDC) , Baudax Bio (BXRX) , Coherus BioSciences (CHRS) , Datadog (DDOG) (one of my 2020 picks), Endo International (ENDP) , Enphase Energy (ENPH) , Barrick Gold (GOLD) , Infinera (INFN) , InMode (INMD) (another of my 2020 picks) and a couple of dozen others.
As long as those charts hold up, I will continue to hold them regardless of what the indices might do. I already have fairly high cash levels and some index shorts, so I feel well prepared in the event the bears finally do gain some downside momentum.
