And once again, the Dow Jones was the winner of the day, while much of the market struggled.
The Dow Jones hit a new all-time high, but the Nasdaq and Russell 2000 had a hard time holding support. Breadth finished around even. Some small caps looked better, but growth names continued to be hammered.
The two-tier nature of the action is causing some significant problems for many traders that are wrestling with the choice between extended "value" names or "growth" names with poor technical patterns and relative strength. The bottom fishing is not working right now, and it is tough to have confidence that the stocks leading the DJIA can keep trending higher.
The gulf between the winners and losers in this market continues to widen, and it is just making it more difficult for traders trying to game how that gap will close. Right now, it is hard to believe that the stocks that have been under the most pressure can bounce if the bigger caps undergo a correction.
Yesterday, it was Janet Yellen's comments about interest rates that caused some selling. Today, it was news that the Biden Administration was supportive of waiving intellectual property rights pertaining to vaccines. Any move to limit patent protection of newly developed drugs is a significant issue for biotechnology. Although this is not likely a serious proposal, it did cause some consternation during the day.
This continues to be a very tough market for most traders. The best way to handle it is with a high level of selectivity, plenty of cash, and much patience.
Have a good evening. I'll see you tomorrow.
