The market is under heavy selling pressure on Thursday morning, but I'm anticipating some bounces and increased volatility this afternoon as money managers make last-second moves to close out the second quarter. It has been a very ugly quarter, and money managers are eager to show clients that, despite poor results, they are well-positioned for whatever may happen next.
Normally the market would be celebrating the fact that interest rates are falling and oil and gas prices are lower. However, the main reason that is happening is that fears of a recession are building. When the economy is soft, bonds are viewed as a safe haven, and oil and gas prices are falling because of the fear that a slower economy will destroy demand.
Selling is very broad this morning with around 1300 gainers to over 6700 decliners. The most negative sign is that 12-month lows are ramping up again and are around 750. At prior lows, there were over 2000 lows, so there still is a way to go before a real retest, but the trend is not good.
I'm sticking with very short-term trading and am playing some of the index ETFs for a potential bounce. There are some very thin small-caps I like, such as Ondas (ONDS) that I am watching, but these illiquid smaller caps need much better market conditions before they can really bounce back.
This continues to be an absolutely miserable market, but one of these days, conditions will shift, and we better be ready for it.