We have a dismal start to the week with the dip buyers lacking confidence to buy into this weakness so far. Breadth is poor at worse than three to one negative and the number of new 12-month highs is down to 60 versus 115 new 12-month lows. That tells us that chasers are taking a break.
Most notable today is the aggressiveness of the selling in the big-cap technology names. The Nasdaq 100 ETF (QQQ) is down 1.5% and the havens from last week such as Facebook (FB) , are not seeing any buying interest so far.
While there is plenty of red on the screens, I am seeing some decent relative strength in the small-cap names I follow. One of my favorites, HTG Molecular (HTGM) is acting very well into earnings later this week. My Stock of the Week, Baozun (BZUN) is steady and I'm seeing some pullbacks in stocks such as Ocular Therapeutix (OCUL) and American Superconductor (AMSC) that I want to buy.
The danger in this market is that the longer it goes without a better bounce, the bigger the risk that the confidence of the dip buyers will erode. There is some support out there this morning, but it is fragile.
There is very little technical support in the S&P 500 down to around 2700 and that is likely a concern of some of the folks that are inclined to jump on weakness.