Some much-anticipated corrective action hit the market Tuesday, but it was messy and inconsistent and reflected the fact that there is still plenty of buyers looking for entries.
Breadth wasn't bad at around 3,500 gainers to 4,600 decliners. New highs dropped to around 400, and we still had a long list of stocks up more than 10%.
Tesla (TSLA) took a hard hit on concerns that chief Elon Musk is going to sell shares, but it was a good excuse for dealing with an overbought situation. Several growth names such as Upstart (UPST) are seeing a poor reaction to earnings, but this is also just a function of dealing with an overbought market. Coinbase (COIN) is another favorite name that is getting hit hard on earnings.
While there was plenty of pullbacks and selling, there continued to be an appetite for some speculative names. Roblox (RBLX) , Altimeter Growth Corp (AGC) , and Amazon (AMZN) performed well, and traders were very busy creating some volatility in bitcoin miners and names like Quantum Computing Inc (QUBT) .
While it was not a particularly good day for the markets, it is necessary action after the run we have had. There is nothing happening at this point to indicate that a major top is forming. On the contrary, this is the sort of corrective action that will help to clear the air and create new setups for further upside.
It was a difficult day of trading, and some of these earnings responses are problematic, but it is the nature of the beast. If it was easy, it wouldn't be so profitable.
Have a good evening. I'll see you tomorrow.