The indices are mixed as market players wonder if there will be a "sell the news" reaction to big-cap earnings that produces some rotational action into secondary stocks or if the disconnect between breadth and the indices continues.
There are signs of relative strength in small-caps, with the Russell 2000 ETF showing some relative strength and breadth running a bit better, but the dip buyers have stepped up very quickly on early softness in the FATMAAN names and have the Nasdaq 100 (QQQ) leading to the upside.
Another sign of small-cap strength is that the number of new 12-month lows has dropped to just 35 Wednesday morning as some of the hardest-hit stocks bounce a little. My list of stocks moving up more than 10% is also a full page long, which is due to better speculative action in smaller stocks.
The dilemma of this market is that there are many stocks that have been in bear markets or corrected deeply, and they look ready for some bounce, but the indices are overbought and in need of correction. Can both those things occur at the same time? The answer is that there are any number of ways the inconsistency in the market action can fix itself, and it will likely happen in a way that few expect.
I am making a few new buys in beaten-down favorites such as Arlo Technologies (ARLO) , Verb Technology (VERB) , Xeris Pharmaceuticals (XERS) , Emcore Corp. (EMKR) , Cresco Labs (CRLBF) , Performant Financial (PFMT) , ASLAN Pharmaceuticals (ASLN) , urban-gro (UGRO) , Ammo, Inc. (POWW) , and Aehr Test Systems (AEHR) , but I am moving incrementally and have plenty of buying power in reserve.