The indices struggled all Monday and closed solidly in the red on poor breadth.
There were two notable changes to the market action. The first is that the trading range narrowed quite a bit. There weren't any big intraday swings that lately have tended to favor the bulls.
The second shift was that the selling remained steady most of the day. There was a little routine dip buying early and some computer-driven buying in the final hour of trading but the bears didn't' run scared. They stuck with their pessimism and were not shaken out at the first sign of a bounce.
Unfortunately, these are not positive developments. It lends weight to the argument that the V-shaped bounce that began last Tuesday was just a technical response to the breakdown that occurred a week ago. The market tried but it has failed to overcome the technical damage that was done when the trade war erupted last Monday.
I often say that bad markets don't scare you out, they wear you out. Monday's action was of the "wear you out" variety. It was a steady drip of selling most of the day and traders were more disinterested than worried. There simply wasn't much to do as stocks struggled to hold steady.
This action suggests that there is more downside to come. Last Monday's lows are still a fairly sizable drop from here, so they aren't being tested yet. If they do come into play the negativity is going to build quite quickly.
Proceed with caution.
Have a good evening. I'll see you Tuesday.