04Mar11:21 amEST

Sticking to Discipline

Despite green futures overnight and more M&A with biotech NITE being bought at a nice premium by BIIB this morning, the glaring weakness in the enterprise software (IGV) and cybersecurity (HACK) sector ETFs compels me to part ways with two longs I would prefer to hold, NEWR and SCWX.

Although it may be just a morning shakeout, I am respecting the fact that both sectors, which have been emerging as growth leaders in the broad market, could easily stage multi-day pullbacks now to set-up fresh entry points. And today may very well be merely Day One of that process, regardless of what CRM (Salesforce) does with earnings tonight. 

At issue now is whether capital is fleeing equities entirely or, instead, seeking out the next rotation. At the moment, it is still tough to get too bearish, too soon. We do not have a bloodbath out there overall, or anything close to it yet. 

Hence, rotation still may be the name of the game for bulls which helps stave off bears. 

With this in mind, a semiconductor like Lam Research is on my radar. The SMH is barely green as I write this, but LRCX is sporting an enticing chart to follow a leader like XLNX higher over $180.

That said, if IGV and HACK pick up steam to the downside today it would likely put me in a holding pattern this week as far as being extra careful with new trades. After all, they led us higher since Christmas and when we see aggressive selling in them like this morning I want to stick to discipline and respect that. 

Sunday Matinée at Market Ch... Stock Market Recap 03/04/19 ...


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