Stocks gapped higher at the open here on Tuesday morning on optimism about China, better-than-expected retail sales, hope that a half-dozen Fed speakers will be a little dovish and a lot of big investors with high cash levels. Interest rates are still rising, Walmart WMT had a terrible earnings report and the danger of a recession still lurks, but after the liquidation that hit last week there are more buyers hunting for a bottom.
I am holding extremely high levels of cash and a number of core positions. I feel that there is no rush to put money to work, especially because most charts still need to develop further in order to have some semblance of an uptrend.
The main difference between my approach to the market and what many others do is that I really don't care at all if I buy the absolute low or not. My belief is that it is the wrong thing to focus on unless you are a day trader or have very short-term time frames.
My main focus is buying a chart when I can define risk, which means that there are clear stop levels, and trying to find some sort of trend that may persist.
I'm neither bullish nor bearish at this point. I'm simply waiting for price action to develop further. I believe there is a high level of risk that the market rolls over again, but that risk will be minimized if we have some better chart development in the days ahead.
I am developing a list of stocks that I want to add as they develop further. Most of the charts are still less than ideal, but a few names I'm watching include Sensus Healthcare (SRTS) , Arlo Technologies (ARLO) , Solid Power (SLDP) , Magnachip Semiconductor (MX) , Eagle Bulk Shipping (EGLX) , Myovant Sciences (MYOV) , Blade Air Mobility (BLDE) , Aurinia Pharmaceuticals (AUPH) , Planet Labs (PL) , AdvisorShares Pure US Cannabis ETF (MSOS) , Ammo Inc. (POWW) , Urban-Gro Inc. (UGRO) , LianBio (LIAN), Kohl's (KSS) , Alto Ingredients (ALTO) , Xeris Biopharma (XERS) , and Northern Oil and Gas (NOG) .
I have partial positions in all those names and will be looking to add further as they develop.
The market still has to prove itself, but if it does, then I'm ready to buy.