Computer-sell algorithms hit again in the last hour of trading on Monday, and took the S&P 500 from an intraday high to an intraday low in about 45 minutes.
There was some minor buying at the finish to prevent a close at the lows of the day, but the manner in which the market is jerked around like this at the last minute has become much more prevalent lately and is bordering on the ridiculous.
Despite the late-day selling, breadth stayed positive. In addition, the biggest laggards were the leaders. Small caps, growth stocks, biotechnology, and a number of secondary stocks that have been hitting new 12-month lows recently saw some relative strength. The late-day selling cut the gains, but there were some signs of bottom fishing, which is a nice change.
These late-day algorithm swings undermine investor confidence. Neither fundamentals nor technicals matter when the algorithms are turned on and push stocks around. I don't know what is going to cause this to shift, but until it does, it is going to be a difficult market to trade.
Despite the manipulation, it wasn't all bad Monday. Some of the lagging names did look better, but they still have much more work to do.
Have a good evening. I'll see you tomorrow.
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Investors are cheering the slowing pace of inflation's increase, but prices are still way up, which means the Fed is going to continue to take liquidity out of the system.
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