The good news this morning is that there wasn't a feeble attempt to try to gap stocks higher at the open. The selling was steady and now after some overnight holders were scared out there is some effort to find support. Breadth is poor with 1600 gainers to 5300 declines and the new 12-month lows are piling up to nearly 350 at the moment.
The market is trying to figure out what the statement from Special Counsel Mueller might mean for the market. Once that is out of the way I'll be looking for the dip buyers to be more active but if Mueller provides more ammunition for an impeachment attempt the market may not react positively to the increased chaos and uncertainly.
It isn't pretty out there but it is what is needed to get us to a low that may hold. The important thing now is to watch for failed bounces. Downtrends are primarily a function of failed bounces and lower lows. Instead of buying dips, market players are more focused on selling strength. If you are buying here you either have to have a very short term time frame or a very long one.
As this market sinks I'm particularly interested in some of the smaller caps that are more likely to be unfairly sold. They are thrown out without regard to their individual merit and therein lies some good opportunity. One example on my radar is Pareteum (TEUM) which offers mobile virtual networks (MVNO) and is benefiting from trends in Internet of Things (IoT) and 5G.
A bigger cap name I'm watching is Twitter (TWTR) which has had relatively strong price action in the recent poor market. It received a Buy recommendation today from Pivotal Research with a target of $48.
This is not the time to be a big buyer but there should be a few bounce attempts once we are past the Mueller statement.