The action was random and inconsistent on Tuesday, as investors awaited important economic news on Wednesday morning and a speech by Fed Chair Jerome Powell on Wednesday afternoon.
Bullish optimism has proven to be a trap in front of prior Powell speech, and it appears investors haven't forgotten. There was reluctance to add long exposure, but there wasn't a rush for the exits, either. Breadth was two-to-one positive early in the day but dropped to around 4,800 advancers to 3,400. Small caps and China-related stocks performed well, while big-cap technology names, and Apple (AAPL) in particular, were weak.
Tuesday's action is simply a setup for a reaction to the news that will occur the following day. It is positive that there wasn't another wild runup into the news like we have seen several times this year, but there is still quite a bit of bullishness about a more friendly Fed which may not be justified.
The good news is that we should have some increased volatility and trading activity on Wednesday. The bad news is that the risk of a negative response is quite high.
Have a good evening. I'll see you tomorrow.
