The S & P 500 bounced from its rising 50dma today despite the big rally in the Japanese Yen. Every single hedge fund under the sun and its grandmother is short the Yen in size, so a strength there naturally puts pressure on equities and bonds. The world still trusts Bank of Japan’s ability to beat the crap out of its currency, so the pullbacks in equities have been orderly so far, REITS and high-yield assets being the exception.
There is still plenty of risk appetite for buying dips in select U.S. equities. Today’s bounce does not change the big picture. We are still in a range-bound market environment with elevated volatility – an environment that is known to produce a lot of fake breakouts and breakdowns and be more favorable to mean-reversion setups from important technical levels (look at the bounces in $SPY and $IYR today). This does not mean that the market won’t look strong or weak for 2-3 days in a row. It will look strong or weak long enough to convince most market participants to lay in one direction and then it will swiftly pull the rug under their feet.
With that in mind, there are still plenty of opportunities for nimble traders that manage to quickly adjust to the new market environment and realize that many breakouts and breakdowns are likely to deliver a lot smaller gains than what we got used to in the first 5 months of the year. Here are six stocks that have managed to withstand the pullback and are setting up again: