It is a dull day out there but breadth is slightly positive and buyers are inching in. The Nasdaq 100 (QQQ) and FATMAAN stocks are leading, and there is some good bounce in various stocks in biotechnology and SPAC areas. It isn't the energetic counter-trend bounce action that often occurs in poor markets but there is a bid and stocks are holding above key support levels.
A couple of things are driving buyers. First, is that the end of the third quarter is next Wednesday and there is likely some window dressing and positioning. The third quarter marks the end of the fiscal year for some funds and so it does tend to have more significance.
In addition, there is some hope that Congress may work out a fiscal stimulus deal. There is a great amount of pressure on politicians to deal with some of the financial stresses that are not going away. The Fed has also made it clear that fiscal relief is needed. If a deal is done there is very likely to be a positive reaction, so there is some anticipatory buying as a result.
One of the issues that occur after the poor action we have had this week is that there simply are not many good charts. Charts need time to find support and build a base. When they have been dropping and then suddenly bounce it does not make for good entries. When the bottom in this market does occur there will be very few charts that you will want to buy using standard setups.
I'm doing very little today. I do have a shopping list and it is nice to see some good bounces in biotechnology and SPACs, but I don't see any rush to put cash to work right now. The goal isn't to buy a low point. The goal is to buy when you have the best chance of catching a sustained move.