Tough to Get Behind This Action

TheStreet.com

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The market is suffering multiple personality disorder today. On one hand, we have around 2-to-1 negative breadth on the NYSE, with weakness in oil, retail, banks and homebuilders. On the other hand, we have Apple AAPL regaining its luster as the go-to name and then quite a bit of speculative action in low-priced China stocks and some junk names. Nasdaq breadth is close to even, and there are some pockets of momentum particularly in technology names.

The dilemma of this sort of action is that the technical negatives are quite evident. We had a classic oversold bounce on declining volume during the holiday week, and now we need to consolidate. Traders are anxious, however, to put some performance points on the boards, and they are chasing junk and are back on the Apple train. They may not be true believers, but they are going to keep pushing while they can.

Trying to put new funds to work here is not an easy task. Most of the strength is coming in names that were already extended, and given that the overall market action is mixed, it is tough to be too aggressive. A good example is Facebook FB which has been bouncing straight up but is heading into resistance as it fills the July gap. It looks like massive mis-positioning by overanxious shorts who thought the lockup would keep the pressure on the shares.

Nam Tai Electronics NTE , my stock of the week, continues to perform well with a move to highs on good volume. That is the sort of action I expect to see in a healthy market, but there isn't too much of it to be found yet.

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