After a very ugly open on Thursday morning, the dip-buyers made a good attempt, and managed to push the S&P 500 close to even before another bout of selling hit in the afternoon. At the end of the day, it was just more bear market action, and it wasn't pretty.
Breadth was around 2,850 gainers to 5,400 decliners, but new lows expanded to over 880, and there just isn't any leadership out there.
Some bulls were chattering about how oil and gas prices are falling, and bond yields are declining, but what they seem to be missing is that this action is driven primarily by growing concerns about a recession. Inflationary pressure may be lifting a bit, but the price we have to pay for that is slowing economic growth. Even worse, the Fed is not nearly done with its campaign of rate hikes.
We kick off the second half of the year on Friday, and historically it is one of the best days of the year. That isn't any big secret and one of the problems, when there is such obvious seasonality, is that it can turn into a bull trap if too many folks are buying on strength and then it doesn't materialize. I suspect we will have a decent amount of volatility that will provide some trades, but lots of traders will be leaving early to enjoy the holiday weekend.
Currently, there isn't much to do in this market other than some very short-term trading. This is no market for old stock pickers. We just have to wait it out and see how things develop down the road.
Have a good evening. I'll see you tomorrow.
