Monday's strong momentum has fizzled and there doesn't seem too much FOMO (fear of missing out) this time. Traders were really whipsawed over the past few days and now they are more concerned that it could happen again.
For a long time, we had persistent V-shaped action but this setup is different. Typically, the V-shaped action starts slowly and then gains traction as the worry about being left behind gains strength. This time there was an immediate huge reversal so there was no choice but to chase big if you wanted exposure.
The bottom line is that volatility is back and that is making traders more cautious about straight-up moves. While they aren't taking profits, they are hesitant about buying.
Breadth is running OK, with about 3,550 gainers to 2,800 decliners, and there are about 60 new 12-month highs versus 80 new lows, which tells us that we are now in a trading range with the indices well off the lows and highs.
There are a few names on my radar today.:
-- Rayonier Advanced Materials (RYAM) is working on a pocket pivot and needs to take out $21 resistance.
-- Recent stock of the Week, PagSeguro Digital (PAGS) is at a new all-time high and has plenty of traders looking for entries on pullbacks.
-- Health Insurance Innovations (HIIQ) is developing some solid support after some volatile action following a good earnings report.
The S&P 500 is slipping to intraday lows as I write. FOMO is not working so far today.
