The indices finished Tuesday with minor losses on negative breadth but most notable were a few pockets of speculative action in small-cap China-related names and some of the cannabis plays.
Overall, the trading was lumpy and bumpy -- neither bulls nor bears were able to gain traction. The FAANG names performed relatively well and strength in Target (TGT) and Kohl's (KSS) helped retail. It wasn't a great day but it wasn't bad either and there wasn't any big rush for the exits.
The bullish spin on this action is that it is a pause that refreshes and with the likelihood of some more positive news on China trade there is still a solid catalyst. Charts need some rest and the best way to do that is for the indices to trade flat like they did Tuesday.
The bearish spin is that the market is losing momentum and the negatives are starting to matter. The biggest negative in the bearish quiver of arguments is that the economy is slowing. Even China had the slowest growth in many years, although monetary policy is still working to support stocks.
The bulls still have control of the market and can afford to rest and consolidate. However, if they stall too long it will make some folks nervous.
I still like the stock-picking and pockets of speculative trading but the bears are champing at the bit and we have to say vigilant.
Have a good evening. I'll see you Wednesday.
