After the relentless buying on Monday, conditions looked good for some upside follow-through, but it turned into a mixed and dreary day with a negative bias. It wasn't terrible action, but the inability to build on the biggest gains of the year was a disappointment, and, once again, the big-cap technology names were poor with all the FATMAAN names in the red.
Breadth was negative with around 2,850 gainers to 4,900 decliners, but the biggest problem was that the pockets of momentum were limited. Rocket Companies (RKT) stood out as a social media-driven play, but there was only a handful of stocks that moved more than 20%.
The key to the market strength earlier this year was that key sectors had good momentum, and stock picking was working. That has narrowed quite a bit now, and it is impacting sentiment. Market players were not in the mood to chase Tuesday.
The action Tuesday does not totally negate Monday's positive action. A pause day after a big bounce is not unusual, but we need some better momentum under the surface if the indexes are going to retest the February highs.
We were spoiled with an oversupply of good trading to start the year, and now it is becoming more work. Just keep at it, and the positive results will come. This is a difficult market right now, but that is the nature of the beast.
Have a good evening. I'll see you tomorrow.
