Quiet, but generally positive action continues for the third day in a row. Breadth is slightly negative and the indices are close to flat. Most notably, there continues to be some pockets of good stock picking but you need to be selective and manage positions carefully.
This slow and dull action often resolves itself to the upside as bears grow impatient and figure 'if you can't beat them, then maybe we should join them'. This leads to short squeezes and 'fear of missing out' and before you know it the V-shaped bounce gains traction.
I'm not making any major moves but I've been adding to a few things this morning. NIO, Inc (NIO) is gaining some traction on positive analyst comments this morning from Deutsche Bank that says the company may be 'the next iconic brand' in China.
Pacific Ethanol (PEIX) has seen a surge due to demand for medical-quality rubbing alcohol and I'm adding to a position there.
Myovant Sciences (MYOV) is down sharply on news that its drug did not meet a difficult secondary endpoint. However, it previously met three primary endpoints, six secondary endpoints, and had 54% less risk of adverse events. The likelihood of ultimate approval is very high and I expect that the stock will find support and recover in anticipation of that event.
I continue to see quite a few stocks that look attractive into upcoming third-quarter earnings but they will probably set up better if there is some market volatility first.
