Stock Bargain Hunters Face a Hurdle: Rate-Cut Hopes
Bulls are counting on a rate cut in two weeks, and that is preventing any significant downside.
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Most of my positions are acting well, but there isn’t much opportunity to buy more.
The indexes are green on Wednesday morning, primarily due to the strength of Alphabet GOOGL and Apple AAPL, which is driving the Magnificent Seven MAGS to a gain of 2.3%. Market breadth is only slightly positive, and my list of 10% upside movers is quite short, with just twenty stocks showing unusual strength. Very few names are trading close to day highs an hour into the day.
It isn’t bad action, but it is slow, and speculative interest has cooled off. The algorithms are driving the big-cap technology names that are helping the indices, but the underlying action is quite boring.
In a market environment like this, my main task is managing positions and making sure that there aren’t any major technical breakdowns. I’m inclined to buy some of the pullbacks in names I like, such as Harrow HROW and Emergent BioSolutions EBS, but I’m not doing anything sizable.
There are good-looking breakouts of Perpetua Resources PPTA and Ocular OCUL, and EOS Energy EOSC has solid follow-through.
The bears are still intently focused on trying to call a market top, but the problem is that the action in most stocks is still quite healthy. There is no rush for the exits, and the dip buyers are providing good support when there are pullbacks.
I’d like to be more aggressive with some new buys, but there just isn’t much showing up on my radar right now. We may need some stronger downside action before we see better technical opportunities.
Investors are anticipating that the Fed is going to cut a quarter point in two weeks, and that is offsetting any bearish arguments right now.
At the time of publication, DePorre was long HROW, EBS, PPTA, OCUL, EOSE.
