The market has been hit hard enough for long enough to set up an opportunity for some oversold bounce, but the buyers were unable to generate any momentum. There was some brief strength in the morning, but it fizzled out, and stocks drifted lower the rest of the day.
It was the fifth-straight day of losses for the S&P 500, which is rare at the start of a new month. The last two times were in June 2011 and February 2002.
Breadth was mediocre at around 3,400 gainers to 4,700 decliners, but the most worrisome stat is that new 12-month lows hit nearly 400 names. That is a high reading, because the indexes are still well above their October lows.
The big problem is that there isn't any news to act as a catalyst. Investors are talking about inflation, recessions, employment, the Fed, inverted yield curves, and other negative macroeconomic matters. Still, there isn't any complex data or news to trigger some elevated movement.
We are heading into the producer price index on Friday and then consumer price index and the Fed decision next week, which will help to shake things up, but there isn't any good reason to do much right now.
We have some oversold readings, and with the S&P 500 down day after day, the odds for some bounce action are increasing, but the folks interested in buying right now are not likely to be long-term investors. They are looking for quick flips and will likely sell into strength very fast.
I hope you have a great evening. I'll see you tomorrow.
