Once again, the major equity indices are covering up some very poor action.
The DJIA is trading up more than 275 points, with 26 stocks up on the day and four stocks down. That may sound like classic bull market action, but if you look at the seven FATMAAN names -- which had some very good earnings -- only one is trading higher.
Stocks that tend to attractive speculative traders are weak, while those that are favored by longer-term buy-and-hold investors are strong.
These sorts of rotations happen all the time. The current one started back in mid-February and is really wearing on many individual traders who focused on fast-moving small-caps and growth names.
As I've often said, bad markets don't scare you out, they wear you out. This one is wearing out a lot of folks.
The dilemma is that most of the hot-money traders have little interest in chasing names such as UnitedHealth Group (UNH) or Home Depot (HD) , which are quite extended but have great relative strength. On the other hand, the small-caps that were so hot eight weeks ago are still struggling to find support, and the bounces have fizzled out quickly when they do occur.
Either you have to be willing to completely change the stocks that you are trading, or you just have to stand aside and wait for conditions to change. I'm doing the latter.
There are plenty of names that I think will bounce back, but they are not doing so right now, so there is no choice but to wait.