Following a big gap-down open, the indexes made a try at a bounce, but after about 90 minutes of effort, they threw in the towel. The opening lows were then tested and failed to hold.
Many market participants are anticipating similar action on a longer-term scale with a retest of the lows that occurred on March 23. There is a gap in the chart on the morning of March 24 that many technicians will be looking to be filled before the lows of the year come into play.
Small cap funds (IWM) and bank funds (XLF) as well as several groups like airlines are quickly approaching the retest areas. The danger in these charts is that even buyers who are more focused on fundamental rather than technical patterns are likely to wait to see if the retest occurs before committing capital.
One of the big problems is that there are some reports that there is a rebound in coronavirus cases in some areas of China and shutdowns are occurring. To little surprise, there are also intelligence reports that China grossly distorted the coronavirus reporting, but now one seems to know what the truth might be.
Some of the selling today is also caused by concern about Thursday's weekly unemployment report. Everyone knows it will be bad, but how bad? Fear of the unknown is preventing buyers from believing that maybe the worst is already fully discounted.
I continue to avoid any buying of individual stocks right now. There are some day trades to be had by the nimble and swift, but this is no market for old stock pickers. It is a good time to stand aside on your big pile of cash.