The market is battling to bounce back this morning, but it is a very tough slog as short-term flippers, and trapped longs are anxious to sell into strength. The action has been so poor recently that there is little confidence that a bounce can gain traction, and that causes any upward movement to be quickly sold.
On the positive side, there are some very extreme readings. Many stocks are very oversold, and sentiment is about as bad as it gets. Some traders are frustrated that volatility readings have not spiked higher, but if a bounce can hold up for a while, then we should start to see some more buyers start to inch back in. Fear of missing out will build the longer that things stay positive.
I'm mainly looking for situations where there is a little bit of relative strength. There is a very large difference between the technical pattern of stocks like Apple (AAPL) , which is still fairly early in its corrective process, versus a group such as biotech represented by iShares Biotechnology ETF (IBB) which has been correcting for well over a year.
I have added some AdvisorShares Pure US Cannabis ETF (MSOS) this morning as the cannabis sector is another group that has been correcting for a very long time, and there has been some slight relative strength in the last few days. Myovant Sciences (MYOV) is a biotechnology name that has had very positive news and has a clear support level now at around $8.
I would like to put more cash to work, but I need to see sustained improvement in price action. Recent bounces have only lasted a few hours, and when they fail it creates a new wave of liquidations. We have some mildly better action this morning, but it isn't good enough to trust.