Dip Buyers Rescue Market Again, but Where's the Leadership?

 | Jun 15, 2017 | 4:34 PM EDT
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Stock quotes in this article:

IWM

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spy

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QQQ

Market players were a bit worried this morning, but the dip buyers showed up and prevented downside momentum from building. The Russell 2000 ETF (IWM) was flat for most of the day, but the S&P 500 ETF (SPY) and Nasdaq 100 ETF (QQQ) drifted upward most of the day.

Despite the benign action intraday, we still ended up with only 2,000 gainers to 4,750 losers. In addition, there were 175 new 12-month lows to 150 new 12-month highs. We haven't had more new lows than highs in a while, and it's noteworthy as it shows how momentum has died recently.

The bulls can take some comfort in that the selling didn't accelerate during the day, but that didn't mean there was any reason to do much buying. It has not been an easy market for stock pickers lately, especially with the FAANG names and many of the key momentum stocks losing their appeal.

If you are looking for market leadership, you will have a hard time. The financial sector has been showing some relative strength and that helps to hold up IWM, which is about 20% small banks, but without the FAANG leadership there isn't anything else really sticking out. If you look at the list of movers today, it is just a mishmash of action without any themes or key sectors.

I'm becoming more negative on this market as I am unable to find new buys. The indices still are in decent technical shape, but I am seeing signs in the price action of a potential down leg. The bearish bet has been a loser for a long time and I'll be ready to revert to a more constructive mindset, but I see little choice but to be more pessimistic right now.

Have a good evening. I'll see you tomorrow.

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