The S&P 500 is hitting its low point of the day as the FAANG names have reversed lower and breadth runs negative. There isn't any major rush for the exits but the momentum is more concentrated on some of the "economic reopening" plays such as the airlines and Boeing (BA) . Small-cap speculation has slowed and the Russell 2000 ETF (IWM) is struggling.
It isn't just the bears that would welcome a pullback in this market, many bulls would like some better entry points and weakness to buy. Chasing stocks higher day after day grows tiresome when you still have idle cash to put to work. Trying to stay in tune with a market that seems to be acting without regard to the news flow so often is quite exhausting.
While I'm not anticipating any major market pullback, I am looking for some signs that we may have some brief corrective action. At the top of my list is an intraday reversal and a poor close. We have the intraday reversal Thursday but it is fairly mild and we have to wait to see if there is any acceleration of selling into the close.
Even with that sort of action, it is going to be tough for the bears to gain downside traction, especially since bad news doesn't seem to produce any negative response. We have a long list of negative developments to explain some downside action but we just haven't had any come to fruition.
One the strategies I'm developing right now is to slowly start to build some longer term positions in a few biotechnology names as the pullback developes. This remains one of my favorite groups as it is relatively insulated from the ongoing coronavirus sector.
I don't see any rush to load up on these names but I'll be watching to make some smaller buys as the market action develops.