After a gloomy start to the week, dip buyers are showing some mild interest. Banks are leading to the upside, but this is mostly index-driven action with breadth still solidly negative. There are only 20 stocks hitting new 12-month highs, while over 650 are hitting new 12-month lows. However, there are enough oversold charts to bring in some buyers for short-term trades.
The action for the next few days is all about positioning for the FOMC interest rate decision on Wednesday afternoon. It is expected that there will be a hike of 0.75%, but there is also a chance that the hike could be 1%. This is being priced into the market, but the problem is that the Fed is not likely to hint at the dovish pivot that so many market participants are looking for.
While the indexes are seeing some minor upside, the pockets of momentum remain dismal. There aren't even 10 stocks moving up more than 10% so far today. Retail speculators and hot money traders are not finding many day trading opportunities right now.
I'd like to be more active with some more buying, but I simply do not see good chart setups or sustained momentum. My Stock of the Week is EOS Energy (EOSE) which is a green energy play and in one of the better sectors, but there isn't enough speculative interest right now to move it.
One of the most dangerous things about a market like this is that traders want to do something and come up with some questionable justifications for buying, such as excessive negativity or poor positioning. The truth is that it is a bear market, and longs just aren't going to work very well.