It's a Rest Day as Investors Anticipate Earnings and Iran News

The indices are trading close to flat on Thursday, with breadth running only about 40% positive. New 12-month highs are around 160 and new lows at 70. The list of 10% movers is down to about 30 names.

Semiconductors (SMH) are leading and becoming overbought, but the Magnificent Seven ETF (MAGS) is lagging, mainly due to Tesla (TSLA) and Microsoft (MSFT) .

Cuts or Buys, No Middle Ground

On days like this, I review each of my positions and divide them between potential cuts or potential buys. There is no middle ground. I either like the stock enough to add to it, or if I don't think the technicals are favorable and I want to reduce. It is far too easy to dump stocks into a "hold" box and then ignore them. Make sure you don't default to inaction.

I mentioned on Wednesday that I reduced a few things, and I'm doing a little more reduction on Thursday. This isn't because I'm bearish but because I'm being strategic. I want to be more aggressive with certain names when the charts improve and market conditions shift. If I hold less, it changes my psychology and makes me less likely to be stressed by pullbacks. I like being in the position of wanting to buy more of a stock rather than feeling like I'm in too big.

Current positioning

I currently have about 50 names in client accounts and my cash levels are around 23%, which is a bit lower than I would like. One reason the cash level is low is because of a larger than usual position in mega-cap name Alphabet (GOOGL) , which sucks up capital and serves as a parking spot to some extent.

I feel good about positioning right now and am optimistic about the opportunities that are going to develop as the Iran situation is normalized and we are hitting with earnings news from the Magnificent Seven. I suspect small-cap stock picking is going to work well, especially after we have some pullbacks and consolidation.

Not a Bull, Not a Bear

A common mistake that many investors make is to focus too much on being bullish or bearish. There is so much more to the market than the direction of the indices, and you miss out if you use black-and-white thinking.

I like to say that I'm not a bear or a bull, I'm an opportunist. The great thing about the stock market is that there is always a new opportunity regardless of market conditions. If you stay focused, you will find them.

At the time of publication, DePorre was long GOOGL.