It was an unpleasant day of profit-taking and consolidation but it wasn't bad enough to kill the recent uptrend. Small-caps were particularly weak and there was also heavy selling in some of the recent IPOs that have been leading such as Zoom Video (ZM) , Revolve Group (RVLV) and CrowdStrike Holdings (CRWD) .
The biggest problem Monday was there just wasn't any news flow for the market to react to. The dovish Fed is well known and embraced and there isn't going to be anything notable on China trade, at least for a few days. There are still some issues with Iran and other political events but there was nothing much for headline-reading algorithms to play.
In a bad market, we usually see a series of days like this. In a bad market, the action wears you out rather than scares you out. It tends to be tedious and slow with little working. However, in the context of the positive technical conditions that we have now, this action is the best way to correct and shake out weak holders. Quite often this sort of action will catch folks leaning too bearish, which is why we so often hear the cliché "don't short a dull market."
Gold continues to run higher as the dollar continues to collapse. The weak dollar is the main force in the market right now and is driving bonds, precious metals, utilities and even bitcoin. When that shifts watch for a rotation back into some of the names that are struggling but there is no way to gauge how much lower the dollar may drop.
Have a good evening. I'll see you Tuesday.