Stocks opened weak Monday based on negative China headlines but that seems to be an automatic buy signal for many market players. The indices have been working higher since the opening lows and there are a few pockets of momentum in names such as Tesla (TSLA) , InMode (INMD) and Walgreens Boots Alliance (WBA) .
Breadth is sluggish at around two to one negative but has improved slightly. It's interesting that there are around 80 new 12-month highs and a similar number of 12-month lows. That is very unusual for a market that is so close to all-time highs but it illustrates how poor the action is in many individual stocks.
The challenge of the market is that while the indices are holding up quite well and there are some narrow pockets of strength the vast majority of individual stocks are languishing and charts are not offering much in the way of entry points.
At some point this inconsistency will resolve itself either by the indices undergoing a deeper correction or individual stocks acting better. The bulls are hopeful for individual stocks to improve and provide a better foundation for more upside in the indices but currently this action is not supportive of that scenario.
The bears are rooting for the weakness in individual stocks to spill over into the indices. However, big-cap names such as Apple (AAPL) refuse to give in. Until there is a shift in some key large-cap stocks the indices are going to stay sticky to the upside.
I've taken a few stops this morning so my cash levels continue to increase. I'm a buyer if I can find some setups I like but I'm not seeing much.