The indices have bounced falling a waterfall decline intraday, but this is one of those days where you can't help but wonder if this action is foreshadowing something worse.
While there isn't any major technical damage, the lack of bulls and the sour mood suggests that maybe this "economic slowdown" issue might continue to be a problem.
The main thing the bulls have going for them right now is that the China trade negotiations resume on Thursday and there is potential for a positive headline again. Many market players scoff at the idea that there is any real progress being made but the market is going to rally on a positive headline regardless.
This action is starting to create some fairly deep pullbacks. I started rebuying some Pyxus International (PYX) , which is one of my favorite cannabis plays and was a big winner earlier this year. The pot sector has been under stress lately but there should be some good opportunities as they eventually regroup.
I have my eye on a few other things including StoneCo Ltd. (STNE) , Sarepta Therapeutics (SRPT) , Zscaler (ZS) , Bloom Energy (BE) , Axsome Therapeutics (AXSM) and Viking Therapeutics (VKTX) However, I'm not rushing to add right now.
There is a strong likelihood we are going to have a spike on a China headline fairly soon, so it is prudent not to press short positions too hard. There will be better opportunities to build some dark side trades after trade news is released.