The action in the indexes started very mixed, but under the surface, there has been some major moves in various sectors. Software, big-cap technology and many high price-to-earnings stocks are selling, while money moves into financials, oils and other groups that have lagged.
There is no obvious catalyst for the move, and that is causing some worry and concern. There is some big money making major moves for various reasons, and that is causing instability in the broader market.
What makes the action worse is that there is no obvious new catalyst. There are no major economic reports Monday nor any develops on China trade negotiations. The Fed is in a blackout period prior to its next meeting, so there is no news in that regard, either.
This is just good old-fashioned volatility and there is no obvious explanation for it. There appears to be some sensitivity to valuations as it is the expensive, high momentum names that are getting hit the most, but the selling is by sector and without much regard for the valuation of individual stocks.
The good news is that this sort of volatility is going to produce reactions that should be tradable. The time is not easy, but at least it is far more interesting than the slow trading that has been dominating lately.
We'll see what sort of bounce can develop after this strong selling. The most important issue this afternoon will be whether the indexes close near the lows of the day or not.