Follow the (Right) Leaders

Working our way through another shaky final hour here, the glaring weakness in tech (due to FANG and software selling more than offsetting the CY buyout-led bounce in chips) stands in stark contrast to the small caps fighting to hold green. It is hard to put too much faith in small caps, though, unless QQQ can stage some type of meaningful bounce here in the final thirty minutes of the session. 

As a result, as much as I want to nibble on some beaten-down longs and/or names holding up very well like WING in the fast/casual dining space, I am more keen on letting relative strength longs I am holding do their thing while not being too liberal with laggards. 

That said, it is hard not to acknowledge the sector-wide strength in solar stocks, yet again. Solars have been firm for a while now to little fanfare. But if this market can get out of its own way anytime soon I suspect solars will be a hot sandbox to play around in. 

Sunrun is as good of a domestic chart as any, and has the makings of a new leader in the group. In prior market cycles we would have seen solars get crushed during these high beta corrections. But not this time, a RUN has been a cool customer and is all the more intriguing back over $17 this summer.