The immediate reaction to the much higher than expected CPI numbers was tepid, but there has been steady selling all day as the market digests the news.
Breadth has slipped to almost 3 to 1 negative, all of the FATMAAN names are deep in red, and the ARK Innovation ETF (ARKK) is being slapped with another decline of some 3.75%. Of 56 recent ARKK buys, only two are trading in positive territory.
There are a couple of positives within this miserable action, however. Small-caps ( (IWM) ETF) are still holding at Tuesday's lows but look quite precarious.
Another positive is that biotechnology names are seeing some good relative strength. The biotechnology sector has been the leader to the downside since the February highs and has been deep into a bear market for a while. Some of these names are bouncing nicely Wednesday, including Forte Biosciences (FBRX) , Myovant Sciences (MYOV) , ANI Pharmaceuticals (ANIP) , Aurinia Pharmaceuticals (AUPH) , Sio Gene Therapies (SIOX) , and a few others.
The conventional thinking is that the senior indices will drag down everything else when they correct, but there are some notable differences in relative strength, which is a positive.
This is a very ugly market right now, but the good news is that we have needed the big caps to catch up with the poor action in growth and other sectors. That is finally happening, but it will like take some time for it to play out.