The dip buyers had some opportunities to do their thing today but failed to hold on to gains. News that Larry Kudlow has been appointed by President Trump as his new Economic Director produced one intraday spike but it didn't last long and the indices went out near the lows.
Once again the Nasdaq and Nasdaq 100 exhibited relative strength as the big cap FAANG names -- Facebook (FB) , Amazon (AMZN) , Apple (AAPL) , Netflix (NFLX) and Alphabet (GOOGL) -- were a safe harbor. We also had some wild speculative action in biotechnology names like Arcadia Biosciences (RKDA) and Syndax Pharmaceuticals (SNDX) .
These pockets of speculative action tell us that this is not a fearful market. It is being affected more by a lack of buyers than any great desire to escape stocks. Breadth was around 2500 gainers to 4200 which isn't terrible in view of the point loss in the indices, but the buying was obviously more selective.
As I've often pointed out, the bears have typically done a very poor job of building on downside momentum. More often than not we will have some sort of bad news that causes a drop and then the dip buyers jump in and the corrective action is over. That has been the pattern for a while. They only real question is when do we get the bad news that everyone wants to buy?
The indices are struggling and the action is narrowing but there is some interesting speculative action that is preventing sentiment from turning more negative. The dip buyers are lurking and we are one bad headline away from a bounce.
Have a good evening. I'll see you tomorrow.