After sharp losses on Friday, conditions were good for a bounce -- but it was an odd day Monday of mixed action with some pockets of strong momentum and other pockets of dismal behavior.
Breadth was two gainers for every loser, and there were just about as many new 12-month lows as highs. What was most notable about the action was the parabolic action in Tesla (TSLA) . The stock has been ripping higher, but the pace of the gains picked up substantially.
Back in the bubble days of 1999 to 2000, there were dozens of stocks that made moves of this sort. This is much narrower now, but it illustrates how there still isn't much fear in the market, despite the recent pressure caused by the coronavirus.
Several other names such as Zoom Video (ZM) and Reata Pharmaceuticals (RETA) did quite well, but it was a mixed bag of action with many market players anticipating that this bounce may not last for long.
One issue that will be on the agenda Tuesday are the results of the Iowa caucuses Monday. If U.S. Sen. Bernie Sanders does well that may provide an excuse for more selling of health care stocks that would suffer under his "Medicare for all" plan. There is still a long way to go before there is any possibility of new policies passed, but events like these can help to fulfill technical tendencies.
Alphabet (GOOGL) reported and was well ahead on earnings per share, but missed on revenues. The stock is seeing some "sell the news" pressure on the news and is down about 3%.
Overall the market is in a very precarious position technically. The S&P 500 held where it needed to, but it will be challenging to gain upside momentum from here. There are reports that the coronavirus in China will have a substantial negative impact on Chinese gross domestic product and a domino effect in many other places, but the market is not yet embracing that pessimism to any great degree.
The market fought hard last week to resist the fear of the coronavirus, but finally succumbed on Friday. It is still fighting other negatives and we have to wonder how long it can hold up.
Have a good evening. I'll see you tomorrow.