We have some messy market action Wednesday morning as breadth is running about 2 to 3 negative, and the indices are struggling. ADP jobs news come in lower than expected, but ISM Services were much higher than expected, which is also adding to some confusion.
Meme traders aggressively chased Robinhood (HOOD) to start the day, but the stock has reversed sharply and has now trapped some chasers. meanwhile, some good earnings reports from the likes of General Motors (GM) (see Stephen Guilfoyle's take on GM here) and Big Five Sporting Goods (BGFV) are being sold, which is a continuation of a recent theme, especially among smaller stocks.
This market continues to be very tough on traders as there doesn't seem to be an interest in strong fundamentals or news, although there are random movers like HOOD that provide hope for better trading. There is no real sustained momentum, and that tends to create even more quick flipping.
I see quite a few stocks that I like on a fundamental basis, but the price action is terrible and there just isn't any reason to tie up capital there right now. It doesn't help that we are in a slower period seasonally.
We still have this issue of the great divide between the indices and the action in more than half of all stocks that are trading under their 50-day simple moving average. Trading is going to stay challenging until that divergence is reconciled in some way.