Sift Through the Summer Drift

Despite an opening gap higher off the overnight strength in the futures session, market players who came back off the holiday eager for energetic action figure to be somewhat disappointed this morning. Indeed, many stocks on my screens early on are well off session highs, though I am looking to see if bulls can regroup for another push higher today before drawing too many conclusions during what is still a light, holiday week. 

That said, we do have the FOMC Minutes later today, at 2pm EST, which could move markets, not to mention the jobs number tomorrow morning before the open. 

One interesting aspect about sluggish markets is that we can better see which individual stocks are true standouts, as they are the ones which possess unique energy and fail to fade with the majority of issues. Typically, that type of action is an indication of strong underlying demand and creates a general bias that once the broad market acts a bit better, these outperforming issues should explode higher. 

Loxo Oncology, the epitome of a mid-cap biotech issue in the XBI ETF, looks to be an example of this phenomenon, as the first weekly chart, below, illustrates. Note the strength this morning in the context of a powerful-looking bull flag pattern the last month or so. Simply put, LOXO looks as strong as any biotech on the board right now and ought to be kept on close watch. 

Finally, it is worth updating Tesla, on the second daily chart, below. An abrupt turn of events has thrown cold water on the bull case for a runaway squeeze, as TSLA not only got rejected on multiple attempts to break and hold over $357, but it is now knifing back under its 200-day moving average, giving the bear case another chance.

Above all else, though, TSLA looks like a rather indecisive chart at the moment to me. Back under $270 now this summer would embolden the bear case long-term however.