It looked like a routine day of selling as stocks struggled with overbought conditions and technical overhead, but it was unusually chaotic and random under the surface.
Most notable was crazy action in oil. The contract for May oil traded in negative territory, which was the first time in history this has occurred. There is such a glut of oil that there is no place left to store it, so holders of oil for delivery in the next few days are being forced to pay to have it taken.
There is concern that the craziness in oil may be a symptom of how economic demand has collapsed in other areas as well, but for a while Monday, Nasdaq stocks were trading strongly higher and causing some market players to wonder how that index can be ignoring the economic issues that exist.
The Dow Jones was the laggard and breadth was solidly negative with around 2,100 gainers to 5,400 decliners, but there were quite a few pockets of strength especially in the biotechnology sector and in the work at home plays.
The lack of correlated action is positive for stock pickers, but as I discussed in "A Bull Market In Confusion" many market players are struggling with trying to reconcile some positive action with the economic issues that are looming.
Earnings will be the focus the rest of the week. IBM (IBM) just reported. The company beat on earnings per share, but it withdrew its 2020 guidance, which is very likely to be a theme all week. The stock is trading down slightly on the news as traders await further comments from management on the conference call.
Technically the overall market is in a tough position here as it extended and dealing with overhead resistance but we saw some surprisingly strong dip-buying this morning and there appears to be an appetite among traders for some buying. It creates an interesting backdrop as we move through what will be a series of negative earnings and economic reports. Keep in mind, it is the price action that is far more important than the headlines.
Have a good evening. I'll see you tomorrow.