It was a productive day of weakness for the market, which needed to consolidate recent gains and work off overbought technical conditions. Breadth was poor, with about three losers for each gainer, but only about 40 stocks hit new 12-month lows, which illustrates how far this market has come over the past month.
There were two positives on Monday. The first was that the pullback was quite mild in view of the negative news flow. The likelihood is that the Fed will take interest rates higher for longer than was anticipated just a week ago, but that isn't having much of a market impact. That is probably due to some increased optimism that a recession is less likely.
The second positive is that there is a good amount of speculative action out there. It fizzles out fairly quickly in some places, but traders have an appetite for risk and are not cowering in the corner. Traders are hunting for strong moves and apparently still have plenty of capital to work with.
We have some earnings news coming up, but no major economic data. Fed Chair Jerome Powell will be speaking, which may be a market mover, but he is unlikely to change what he said just a few days ago. The market keeps trying to spin Fed comments as dovish, so there is the danger that the positive view could suddenly shift.
Overall it wasn't a very good day for the market, but it was productive and helped to create some better charts.
Have a good evening. I'll see you tomorrow.
