Earnings season is underway and we have a positive start. There is mixed action in the big banks that reported with JPMorgan Chase (JPM) leading and Goldman Sachs (GS) lagging, but the financial sector (XLF) is higher and the tone of the action is positive. Breadth is running nicely positive with around 4200 gainers to 2400 losers.
The big shift this morning is that the China trade issue is no longer dominating the action. Earnings tend to shift the focus to individual stock picking and that is what we are seeing.
The biggest challenge for traders now is finding good charts. The rotational correction action that has taken place has left quite a few broken charts and there hasn't been enough time to do many repairs. Action, like we are seeing right now, will be quite helpful but it is a challenge putting cash to work.
One encouraging sign on my screens is better action in biotechnology. That group has been hit particularly hard during the rotational correction but I'm seeing bottom fishing in some of my favored names like Global Blood (GBT) , Aimmune Therapeutics (AIMT) , Personalis (PSNL) , Recro Pharma (REPH) and a few others.
Pot stocks are also seeing some bottom fishing action and I'm in Village Farms (VFF) in that group.
This is encouraging action and it is starting to squeeze some bears and bring in underinvested bulls. There are signs of improved technical action and stock picking.