It was a mixed day for the market with the S&P 500 giving back 0.6% while the Nasdaq held relatively steady due to continued strength in the FATMAAN names. The buying of the big-cap technology names was not nearly as frothy as on Monday and breadth was weaker as well with nearly two decliners for every advancer.
Banks kicked off earnings season with some reports that looked OK, but there was a "sell the news" reaction to JPMorgan Chase (JPM) and Citigroup (C) causing the SPDR Select Sector Financial ETF (XLF) to drop almost 2%.
Apple (AAPL) also experienced a sell the news reaction to its new product announcements Tuesday, which put a little pressure on the technology sector.
For a few weeks, we had some exceptional stock-picking and many stocks made strong moves. It is logical that they consolidate a little as we head into earnings season. There doesn't seem to be any significant impact from either political or Covid news, which is good to see as it keeps the focus on individual action.
Despite the negative breath, many of the stocks I've been discussing recently such as Ocular Therapeutix (OCUL) , Pacific Ethanol (PEIX) , Big 5 Sporting Goods (BGFV) , and Myovant Sciences (MYOV) are act very well.
What would worry me is if we saw more correlated selling without regard to the merits of individual stocks. That is not happening and that is a good reason to stay bullish.
Have a good evening. I'll see you Wednesday.
(JPMorgan Chase and Apple are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells these stocks? Learn more now.)
