The indexes are in the red today, but it is one of these days where the action under the surface is even worse than what the indexes are indicating. Breadth is moving close to three-to-one negative. New 12-month highs have shrunk to 125, there are less than 10 stocks up more than 10%, and the selling is correlated and without much regard to fundamentals.
I wrote this morning that it was time for increased caution, but the selling pressure developed much faster than I anticipated. I've been a heavy net seller and have raised quite a bit of cash as I'm not feeling confident that we will see an immediate bounce this time. We have seasonality and a lack of positive catalyst working against us at this time.
In this sort of environment, I err on the side of selling, and I'm confident that I can buy back my favorites as they develop again. Back in February, selling of this sort went much deeper than many traders anticipated, and I'm on guard in case that develops again.
One new buy I made today was Ocular Therpeutix (OCUL) , which has not bounced much recently compared to other biotechnology names. It received a buy recommendation and a target this morning of $30 from an analyst, which I think will give it some support now. It also has an Food and Drug Administration decision coming soon to serve as a catalyst.
There are a number of names I want to buy on weakness, but I'm going to see if we have some downside follow-through before I become more active.