The selling that started last week is gaining some momentum on Monday. Volume is fairly light, but breadth is running about five to one negative. This is driven more by a lack of buying support rather than aggressive selling, but that doesn't matter much if you are holding positions.
It is always fascinating how quickly the market mood can shift. One week ago there was talk, not only about the end of the bear market but whether there would be a sustained uptrend into the end of the year. The bullish narrative had taken hold, and there was much talk about poor positioning. It now appears that it is the bulls that are out of position, and suddenly they have too much long exposure.
Speculative trading has slowed quite a bit, with only about a dozen stocks moving up more than 10%, but bored trades have been aggressively trading AMC Entertainment (AMC) and its new preferred spin-one, APE. This is an obvious move by AMC to make it easier for them to raise capital in the future and dilute holders, but meme traders are happy to ignore fundamental issues when there is a high level of movement.
I've already raised quite a bit of cash and don't feel the need to make further reductions right now. There are some stocks I'd like to buy such as ZIM Integrated Shipping (ZIM) , Sensus Healthcare (SRTS) , LianBio (LIAN) , Beyond Air (XAIR) , and Uber (UBER) , but I don't see any reason to do so today.
My guess is that the gap on the S&P 500 chart down to 4133 will be filled before we see a bit of a bounce try. 4100 is the high level for the S&P 500, and if that falls, we are going to hear much more about how the recent strength was just a big bear market bounce that is now failing. At this point, this is just corrective action, but the bulls need to be ready with some support fairly soon.