Momentum Wrap – Distribution Days Are Piling Up

Distribution days are pilling up, correlation and volatility are rising, which is usually not a sign of a healthy market. Granted, the $SPY managed to find some buyers near its rising 50dma and tomorrow it could make fun again of all cautious market participants by rallying 2%, just like it did on Tuesday. Nevertheless, the price action in many growth stocks screams caution and it would be foolish to ignore it.

What stood out today? A few biotech stocks, which tend to live in their own dimension. $ALKS erupted 15% to new 52-week highs on positive reports on their depression drug – Apple’s shareholders and Gold bugs sure could use some of that.

$HGSH, which is a Chinese real estate developer, tagged new all-time highs. Another prove that usually the best performing stocks in any given year come from industries no one expects.

In high-correlation pullbacks like the one we are currently experiencing, there are not many stocks making new 52-week highs. It is still important to pay attention to relative strength, because the stocks that manage to withstand a general market selloff are very likely to be the best performers when the tide turns again. Several stocks that made me notable impression today and you should add to your watch list: $TSLA $QIHU $IMAX $AVP $LULU $DG

New Highs

4 new all-time highs among stocks that gained 1% or more: $ATLS $HGSH $SNTS $COR

13 stocks reached 52-week highs while appreciating 1%+ today: $ALKS $GSK $GME $PNK

StockTwits 50 Highlights 

Only one St50 stocks finished green for the day ($KORS), which says more than enough about the current market environment. Stay cash heavy and do less.