The selling that has been weighing on small-cap and growth stocks for weeks is spilling over to big-caps and value stocks today. Many big caps are still very extended, while many of the small-cap names are deep into a bear market.
If the entire market was acting the same way as sectors like biotechnology, gambling, and SPACs, I'd be looking for a bottom, but the problem is that there is unlikely to be much interest in bottom fish small-caps while big-caps names are undergoing a correction. We may eventually see some relative outperformance by small-caps as the S&P 500 names correct more, but that may simply mean that they are not going down as fast as other groups.
Many traders are growing disgusted and weary as this steady selling in small-caps continued. I hear quite a few comments that can be considered capitulatory, but the rotational nature of the action and the big gulf between the big-cap indices and everything else makes it much more difficult than usual to argue that we are going to find some support here soon.
There are some very interesting values developing out there, but that has been the case for a while now, and traders are tired of being stuck in failed bounces.
If the S&P 500 was acting like the majority of small-caps, we would be calling this a bear market, but that isn't the case, and it makes the timing much more difficult than usual. I'm convinced that some of these names are very close to significant lows, but I'm not willing to buy them until we see better price action. If that means having to pay up, then so be it.
This is terrible action right now, and traders are more disgusted than scared. That is a good sign.