After weak action in Asia overnight due to concerns about the spread of Coronavirus, U.S. markets were indicated lower. However, market players are well conditioned to buy any dip.
The indices immediately jumped and now the question is whether there is enough buying interest to push them back into positive territory.
Breadth is running about two to one negative but what is most notable on my screens is that there is some decent stock-picking taking place.
The dilemma of the market lately has been that the indices have become very extended, mainly due to strength in bigger-cap names. Still, small-caps and the iShares Russell 2000 ETF (IWM) are still below the highs hit back in August 2018. The group is not nearly as frothy as the larger-caps and that is keeping stock-pickers bullish.
My gameplan here is to stay focused on the individual names and let them guide me. If I can find some good charts to buy then I will, and if there are some stocks that break down then I will sell them. There is nothing in small-caps to suggest that they are like the big-caps but the question is whether they can run higher if the larger stocks pause or pullback.
I'm seeing some good action in lower-priced biotechnology names such as Soliton (SOLY) , Ocular Therapeutix (OCUL) , Clearside Biomedical (CLSD) and Trillium Therapeutics (TRIL) , although it is a mixed bag and my timeframes are short.
Another group that is doing well Tuesday is cannabis, which tells us that there is still a good speculative appetite despite the major indices needing a rest.
