We have a dismal start to the week, and so far, the dip-buyers are lacking confidence.
Traders stepped up on Friday despite the doom and gloom and managed to bounce some of the worst groups such as biotechnology and growth, but Tuesday morning they are lacking the energy to give it another try.
Breadth is running around 4 to 1 negative, and the new 12-month lows are piling up with more than 600. All the indexes are down, with the DJIA lagging, but there isn't much rotational action this morning. Financials are weak on Goldman Sachs (GS) earnings, and energy is still showing some relative strength.
Small-caps, growth, biotechnology, and other lagging groups are not being sold aggressively, but they lack bids. There isn't much interest in trying to bottom fish these stocks hovering at 12-month lows when the indexes are acting so poorly.
I'm waiting and not doing too much right now. Two stocks I favor are in the chemical group, which should benefit from inflationary pressure. Alto Ingredients (ALTO) is one I've discussed previously, and my Stock of the Week is Tronox Holdings (TROX) . TROX has some great earnings and revenue growth and also has had takeover interest in the past from Apollo Investment (AINV) .
There are plenty of great stocks out there I want to buy, but they need better price action.
