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The buy-on-the-dip folks are doing everything in their power to keep the selling in some of the high momentum names (AAPL PCLN SBUX) from spreading to the rest of the market today. The Dow Jones Industrial Average has been leading the major indices all day, which may not be all that an encouraging of a sign seeing as the stodgier mega caps reside there. That said, the materials, semis, retail, and small caps are starting to see some bids.
My stance continues to be to let this mess sort itself out in the short-term, via a heavy cash position. You have to decide whether you want to trade just for the sake of doing so, or instead be an astute speculator looking for a bet with a discernible edge. Even if your positions have been holding up well, most issues have not enjoyed the energetic breakouts like they did earlier this year. I have little interest in risking dollars for mere pennies. The rotation out of some of the extended leaders towards other areas of the market may finally be getting started. However, I am inclined to let it actually play out for a few days first before becoming aggressive in positioning for it. Other than that, you can see the difficulty in shorting as well, as the dip-buyers are not going to give up their grip on this market so easily. Besides, we are still in an overall uptrend.
I will have more after the bell on my video recap…
