I thought I was just having an odd day today because I was long a few stocks that had good days on a day the major indices were mixed to weak. After looking through my charts tonight it just looks like more rotation took place today. This time is seems to be out of larger caps and into smaller caps. While the S&P 500 and Dow were down today, other indices (NASDAQ, NYSE, S&P 600, Russell 2000) closed higher, near their highs of the day and at new 52-week highs. I guess this type of rotation explains why I’m still finding some good looking pullbacks in certain stocks while the broader market just stays extended. This market is a tough one to sell (and especially to short). But the reaction to earnings tonight was far less enthusiastic than last week, as several stocks got the smack-down. (The 3 day chart on SONS is gonna be fugly tomorrow!) Perhaps these types of earnings reactions will finally bring out some sellers.
My stock picking has been horrible. I think because I’m still buying weakness instead of momentum. Right now, money is chasing the hotties, and leaving the weaker stocks to drift lower. While I anticipate the rotation to safer stock names in the month ahead, it’s hard not to try and flip some of these Top Supermodels of stocks, eh? Just don’t want to be the last man in the pool because they will have a correction.
They never make it easy for us. It does feel like a game of musical chairs right now. Should be a fun scramble when the music stops