The indices finished well off the early lows and we had an energetic dip buy to start the day, but there still was plenty of red on the screens. The bulls provided good support when needed, but they didn't have enough power to push things into positive territory.
Breadth was solidly negative with around 2,400 gainers to 4,300 decliners, but the fact that we had twice as many stocks hitting new lows rather than highs tells the tale of how momentum has slowed. The bears still can't dig their claws very much into the indices, but a broad array of individual stocks are struggling.
One bright spot today was the financial sector, but the FAANG names struggled and there were plenty of landmines for the unwary. We also had some strong momentum in a few places like YY (YY) , Sangamo (SGMO) and Square (SQ) , but it was quite narrow again.
This was the fourth red day out of five for the S&P 500, but on all four negative days we had very good dip buying early in the day and closed well. Today was the first time out of the five that the close was lower than the open, which reflects some fatigue by the dip buyers.
Can the dip buyers keep on doing this? Will every pullback be greeted with an immediate rebound? As I discussed in my prior post, when patterns are this obvious for this long, they tend to stop working. That has not been the case here and it is dangerous to assume it is going to shift. Nonetheless, the dip buying isn't working quite as well and risk continues to increase.
Have a good evening. I'll see you tomorrow.