On Thursday morning, an early bounce try failed miserably, but some rotational action and a last-hour rally provided some market positives.
What was most notable about today's action was that the Russell 2000 fund (IWM) rallied 1.26%, while the Nasdaq 100 (as represented by the Invesco fund (QQQ) ) bounced back from a drubbing, but still finished with a loss of 0.2%. The S&P 500 was within a rounding error of falling into a technical bear market, but the late bounce prevented that from occurring.
Strong action in small caps and secondary stocks held breadth to 3,900 gainers to 4,400 decliners, but the number of new 12-month lows expanded to 3,200, which is the highest level yet in this cycle.
The action in the last hour provided some hope for traders, but given how hard this market has been hit recently, it was not a very impressive bounce. The good news is that the intense liquidation finally stopped for a while, but we will have to see if buyers can generate some follow-through upside.
This market is badly oversold, and sentiment is intensely negative, but it has been a struggle to develop a good bounce. The late-day strength is a good sign, but we are talking about a bounce and not a bottom.
For many months I wrote about how the indexes and big caps have covered up weakness in small caps and secondary stocks. That reversed today as the big caps underperformed. It is a positive, but the market needs to prove that it can build on it.
Have a good evening. I'll see you tomorrow.
