The pattern of action in this market has been remarkably consistent of late. Four days in a row we have had an early bounce attempt that has failed badly. We have had recoveries in the afternoon the last two days, so it will be interesting to see if the buyers show up late today.
I believe the reason behind this pattern is that there are too many traders looking for a quick oversold bounce. They have all sorts of statistics and sentiment surveys that confirm that the mood is extremely negative but there are just too many of them. As a consequence, they are flipping very quickly when they have gains, which is why the bounces can't gain any momentum.
These bounce buyers will eventually get disgusted and give up, which will then give us better conditions for a much better bounce. We may be close to that point this morning and I'm sticking a toe into some ProShares Ultra QQQ (QLD) once again.
One interesting shift today is that the FATMAN stocks -- Action Alerts PLUS portfolio name Facebook (FB), Growth Seeker's Amazon.com (AMZN), Tesla (TSLA), Microsoft (MSFT), AAP's Alphabet (GOOGL) and Netflix (NFLX) -- are doing poorly after all of them were green yesterday despite lousy breadth. Breadth is flattish today with some slightly better action in small-caps. The poor action in FATMAN may be a sign that shorter-term bulls are having some doubts.
As I mentioned earlier, this is a market for trading indices and ETFs. Individual stock picking is almost impossible. We often hear about how it is a "stock pickers" market. Right now it's just the opposite.
I'm slowly averaging into a little QLD and doing little else.