On Thursday the indices held up fairly well and raised some hope of a bit of a bounce, but everyone was blindsided later with the announcement of the Mexican tariffs. The announcement was bad enough but trying to figure out the ramifications as to what it would mean is creating great uncertainty.
Despite the confusion the indices have bounced off their early lows and the dip buyers are showing some interest. Breadth is still very poor with about 2000 winners to 5100 decliners and there are about 440 new 12-month lows, but the early panic has subsided.
I suspect that there is a good chance that the Mexican tariffs never go into effect. This is obviously a negotiating ploy by Trump and I expect to see an announcement that some progress has been made and that the tariffs are on hold as further details are discussed. The tariffs are scheduled to go into effect on June 10 and I expect some action to occur in the interim.
Even if the Mexican issue is dealt with quite quickly there are still plenty of other problems impacting this market. No bounce should be trusted to last long at this point.
The selling has been severe enough in many stocks to start creating some bargains but it is always better to be late than early when doing that sort of shopping. I have a few names on my list that I'll be watching, such as Parsons (PSN) , Enphase Energy (ENPH) and Inseego (INSG) , but I'm not doing any major buying.
