After a brief respite on Friday, the market correction picked up steam. It was an all-around ugly day with breadth of more than four-to-one negative and new lows expanding to over 1,050. There were no safe havens or strong rotational action. Energy stocks had some slightly relative strength, but otherwise, it was a brutal day across the board.
One of the big things that have changed in the last few weeks is that this is no longer a stealth correction. The indexes are crumbling and starting to catch up with all the secondary stocks that have been struggling for months. Unfortunately, even the most battered groups like biotechnology, growth (such as represented by the ARK fund (ARKK) ), and small caps (as in the Russell 2000 fund (IWM) ) are still unable to find support.
The good news is that the business media and traditional Wall Street is now being forced to acknowledge what many traders and investors have known for a long time, which is that this is a poor market environment that is struggling to find support. Big caps still have plenty of room to fall, but many other areas are so extended to the downside that conditions for a snapback are building.
Sentiment is becoming very bearish, bonds are in freefall, and no one is looking for the Fed to ride to the rescue at this point. We have earnings reports coming up that should provide some distraction from the concerns about inflation.
The bad news is that this is miserable action. The good news is that we are another step closer to some sort of bottom. No one can predict when that will occur, but the corrective process is progressing very quickly now.
Have a good evening. I'll see you tomorrow.