After the depressing Jerome Powell press conference on Wednesday, when he ramped up his hawkishness, there was some wild volatility overnight in the futures market. But by the time the regular session opened, most everything was in positive territory and looked like we might be set for a mildly positive day.
The first hint of problems came as small-cap and growth names lagged while the Dow was up over 400 points. New 12-month highs were piling up while CNBC had a headline about positive action. As the day progressed, the big caps and indexes lost their momentum as well. The selling in small caps continued as we intense enough to undercut that 12-month low that was hit on Monday.
Many growth stocks, small caps, biotechnology, and secondary names were birdless again, but some relative strength in big caps held to hide it. It was the same sort of action that frequently occurred last year, but now it is happening at even lower levels, and there is still no clear indication that a bottom is forming.
Investors are awaiting an earnings report from the mighty Apple (AAPL) soon. The response to this report is going to tell us a lot about overall market sentiment. So far, during this earnings cycle, there has been no chasing of strong reports. There has been some buying of initial weakness like we saw with Microsoft (MSFT) , but Tesla (TSLA) failed miserably to hold its bounce attempt.
It is hard to imagine there will be a strong desire to chase Apple higher even if the numbers are very good. However, it may be better for the market if we see a sell-off in Apple that helps to accelerate this ugly market correction.
I have a bias, but I am wondering if this is the toughest market I've ever traded. If it isn't, it is close.
Have a good evening. I'll see you tomorrow.