Although the S&P 500 finished the day with a decline of a little more than 1%, there was some mixed action that indicates a desire to put cash to work.
The small caps ( (IWM) ETF) lagged with a loss of around 2.5% but the Nasdaq 100 ( (QQQ) ETF), which is driven primarily by big-cap technology names such as Amazon (AMZN) , Apple (AAPL) , Tesla (TSLA) , and Netflix (NFLX) , had an impressive gain of 1%.
The overall market mood seemed much more upbeat than breadth which was a pathetic 2,400 gainers to 5,100 decliners. The pockets of strength were the focus Monday and that offset the lack of robust action elsewhere.
In view of the obvious economic issues that the market faces, it is interesting that sentiment is not more negative. However, we should see some themes develop as first-quarter earnings start.
Tuesday morning there are reports from JPMorgan Chase (JPM) , Wells Fargo (WFC) and Johnson & Johnson (JNJ) . The banks lagged Monday so perhaps there is concern that the worst is not already priced into the group. We know that many companies won't be able to offer guidance, but will the market care? That is the question that is going to play out for a couple of weeks.
Technically, the indices have all become extended and vulnerable as they try to build on a V-shaped move. Fundamentals are questionable and there still is not much economic clarity. Still, there is this feeling that people want to buy this market out of fear that they won't have a better chance. The charts aren't very supportive of buying but the emotions have been strong for a while and they are leaning positive right now.
Have a good evening. I'll see you Tuesday.