Corrective action in small-caps, growth stocks, speculative stocks, and sectors such as biotechnology and cannabis is picking up steam, and it is finally starting to drag the senior indices down as the negative sentiment can't be contained.
Breadth is running close to 4 to 1 negative, there are more new lows than new highs, and the FATMAAN names are not a safe haven right now.
I've often written that bad markets don't scare you out, they wear you out. This is definitely a "bad" market for the majority of stocks, and it is really starting to wear out quite a few traders that have been struggling with the poor price action for a while.
The difficulty is that it is hard to imagine how this two-tiered situation can be fixed unless the indices and the big caps are correct to some degree. We had a brief respite last Monday when the DJIA fell hard and money rotated into small stocks and growth names, but it didn't last long, and now we are sitting with this dysfunctional setup once again.
I'm doing no new buying right now and am taking some stops and reducing certain positions as we wait for this to play out. This sort of action almost always lasts longer than you think it will, but we just have to wait for the inevitable cycles to do what they are going to do.