The indices are losing some momentum as higher interest rates are a slow down in the rotation into 'reopen the economy' stocks takes place. Rotational action into some of the sectors like cruise ships and airlines reversed this morning and is putting some pressure on the indices. The poor action in iShares 20+ Year Treasury Bond ETF (TLT) is already a headwind, and it is keeping pressure on the big cap technology names.
Breadth is slipping and is now 3050 gainers to 4550 decliners, and my list of stocks up more than 10% has shrunk quite a bit. The SPAC sector has lost its luster lately and will take some time to find support and reset. There are some great opportunities there, but the group is out of favor right now.
While there are some good setups for stock pickers, the momentum is fizzling out very fast, and we do not see good follow-through with a few exceptions like Esports Entertainment (GMBL) .
Breadth on my screens is quite poor, and that is a warning sign for me to take some stops and reduce some exposures. This isn't the sort of panic selling we saw on Tuesday morning, but it is dripping lower, and that is weighing on sentiment.
The media continues to talk about the action in GameStop (GME) , AMC (AMC) , and Koss (KOSS) , but I have closed those trades and have moved on. I don't believe that this is going to be a repeat of what happened three weeks ago. Traders learned they can't stay around for long, and that means the momentum will fizzle.
Corrective action is picking up. Stay patient and take some stops before losses build.