Earlier this week the story of the market was pockets of strength while the DJIA and S&P 500 struggled. Yesterday those pockets of strength reversed and today we have broad underlying weakness while the indices outperform. Breadth is running around 4300 gainers to 2400 decliners and the new 12-month list is around 170. Instead of pockets of strength hiding behind weak indices, we now have broad weakness hiding behind strong indices.
One group that is showing some life today is oil and gas. Fears that there would be a big ramp in oil supplies following the OPEC meeting have been alleviated and market players are back look for entries.
Outside of the oil and gas group there is some bounce action as bargain hunters are looking for entry in some of the hot momentum names that have dipped. iQIYI (IQ) and Turtle Beach (HEAR) , for example, have been very hot names recently and both are seeing some dip buying interest today.
Overall market conditions look very mixed and I suspect that many traders will be hitting the exits early and looking to start fresh on Monday morning.
Keep in mind that the various Russell indices are rebalanced at the close today. This will cause a surge in volume in the final minutes and there will be dozens of small caps with large blocks crossing at the close. There really is no way to game this action as complex programs are used to acquire the necessary shares and avoid arbitrage attempts.
It is shaping up to be a very deceptive day as not only are the indices covering up weakness, but even though it is a sleepy summer Friday there is going to be some big volume due to the rebalancing. I am not planning on doing anything major this afternoon.
