Most of the time, it is possible to generalize about the stock market to a great degree: Stocks are acting bad or good, there is a bull market or bear market, or some general tendency. Sometimes there is inconsistent action where certain areas are doing better than others. Currently, we are experiencing one of the most inconsistent markets that I can recall.
The S&P 500 and Dow Jones industrial average shrugged off some early weakness and bounced back into positive territory, but breadth is still solidly negative, with the Nasdaq and Russell 2000 in negative territory. The ARK Innovation exchange-traded fund (ARKK) continues to reflect the absolute carnage that is occurring in high-beta growth names. Most of these stocks tend to be technology, but not all. For example, the IBD 50 (FFTY) is more diversified, but it also contains mostly high-beta, high growth names. It is down seven of the last eight days and is suffering a larger pullback Thursday.
A good example of the sort of damage that many traders see on their screens is Snowflake (SNOW) . This was a red hot cloud play with 100% plus revenue growth that Warren Buffett owned. The stock was $429 in December and is now at an all-time low of around $195. There is no support, and there doesn't seem to be any interest in bottom fishing it right now.
There are hundreds of stocks like this that have exceptional growth, but aggressive valuations that keep sinking and not finding support. Many of these stocks do have attractive valuations and will eventually bounce back, but right now, individual merit doesn't matter. If a stock is in the wrong sector, it is being sold. It is as simple as that.
If the Dow and S&P 500 were correcting in a similar manner, then I'd be looking for some bottoming action, but instead, the gulf between the winners and losers is still building as money is now flowing into the "safety" of big-cap value names. There is no indication that this dynamic is about to end.
Patience and capital preservation are the keys. Conditions will eventually shift, but this two-tiered market is making it much harder to navigate.