Once again, we have slow, mixed trading action and a lack of energy Friday. Breadth is running 3,400 to 4,200 negative, and I only have 15 stocks on my scans that are trading up more than 10%. Big-caps are acting better than small-caps, which is helping to hold up the indices, but even the FATMAAN names are all close to flat.
It has been peculiar market action all week with a lack of buying interest but no significant selling either. There isn't any major bearish narrative right now, and there continues to be quite a bit of confidence about the effectiveness of the COVID vaccines and the reopening of the economy.
We have a few earnings reports from the financial sector starting next week before a deluge of reports the following week. These could be catalysts for whatever this market does next.
Although the action is lethargic at best, I'm remaining positive about quite a few small-caps that have been drifting lower on no news. Biotechnology, in particular, has been poor but some names such as Xeris Pharmaceuticals (XERS) , Personalis (PSNL) , Aurinia Pharmaceuticals (AUPH) , Myovant Sciences (MYOV) , and Ocular Therapeutix (OCUL) look very washed out.
There has been some better action in SPACs for a couple of days now, and that is encouraging. The sector has sucked up a huge amount of liquidity. Some movement there would help to get speculation running a bit again.
One SPAC that I've discussed that is perking up Friday is Soaring Eagle Acquisition (SRNGU). Bloomberg has reported a rumor that they are talking with Ginkgo Bioworks about a possible deal. SRNGU warrants start to trade next week, which will create some additional action there as well.
SRNGU has been one of those SPACs that is trading near its NAV and has limited risk. I discussed this in an article on TheStreet on March 22.
My game plan continues to be to make some incremental buys of names I favor that have some support. They may require some patience, but the downside appears limited at this point.