For the second day in a row the market opened strong, faded during the day and then finished with a positive surge.
The intraday action has been quite gloomy for two days now but the recovery in the last hour takes the sting out of it and helps to keep sentiment positive. The bears are not able to build momentum on the midday weakness, which is positive, although it does create some concern that the indices may be close to a deeper correction.
In addition to the choppy intraday action, the good stock-picking that we've seen for a while has been drying up. Overall market volume has been hitting the lowest levels of the year which is a symptom of the slowing in speculative interest in individual stocks.
The charts of the indices remain healthy. However, the tone of the action is dreary and that is the problem. While the market has a habit of shaking off these bouts of weak actions, it is prudent to play some defense regardless.
We have the China negotiations starting up again Thursday, the Lyft IPO pricing and some apparent progress on Brexit. All three have the potential to move the needle. The issue will be whether strength will be used to exit or will it reignite some fear of missing out.
Concerns about economic growth keep bubbling up and strength in bonds (iShares 20+ Year Treasury Bond ETF (TLT) ) confirms that there is a desire for more safety.
We are approaching the end of the quarter and there is likely to be some sizable reallocations between bonds and stocks taking place that could create issues. That was part of the problem back in December and could cause some additional volatility to end the week.
Have a good evening. I'll see you Thursday.