Image Source: Pexels

Market Commentary:

Momentum has narrowed again, significantly.

• The Advance/decline on the NYSE flattened out, the Nasdaq is outright scary. The 52-week new-high/new-low numbers still look healthy for now.
• It is apple picking time in the Northeast. Successful farmers harvest and sell their goods. What is worse than spoiled fruit you cannot sell?
• There is tremendous strength and activity in the bio- tech sector. I would not have any shorts in this sector. Look for a slew of merger activity. I am ready for one in particular.
• Sector rotation was in full effect last week. Insurance and several infrastructure companies were weak after torrid runs. When to buy is sometimes as important as what to buy.
• It is more of a stock pickers market than usual as momentum factors are currently exaggerated, which is fine by me. It seems like the trading algos have been given more room to run, which is scary to me.

Economic data and market clues:

What a week of news coming up. Earnings season is in full gear this week. One week from the election. Wars escalating. No wonder sleep disorder companies are doing well.

Maybe it is time to stop focusing on The Fed and own shares in the best companies in the best sectors.

Interest rates have jumped to levels that few predicted a month ago.

Selected current ideas:

Magnet® :

Castle Biosciences           CSTL

Exelexis                             EXEL

Shift4 Payments                FOUR     

FACTS:

Brookfield Infrastructure   BIPC

Dycom DY

Leidos Holdings LDOS

More By This Author:

Market Momentum Is In Full Gear - Be Choosy And Do Not Chase
Blue Skies, New Highs Remain Disciplined And Do Not Chase Extended Ideas
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