Bids have disappeared this morning, especially in small-caps and some of the speculative favorites. EVs and deSPACs are trading very poorly, and the Russell 2000 ETF is down about 0.9%. Breadth has been dropping and is now around 2 to 1 negative.
The problem isn't that there is a rush for the exits but that there is a lack of bids. Dip buyers are not showing any interest as many stocks are dropping on low volume. There isn't any major change in fundamentals, but there isn't much interest in accumulating 'good' stocks with this weak price action.
The Russell 2000 is still holding breakout levels, but if it drops another 1% or so, it will be testing very important support. I suspect that we have traders standing aside and watching to see how that develops.
There are quite a few names I'd like to accumulate, but I'm not rushing at this point. In particular, some of the SPACs that are closing deals soon like Decarbonization Plus Acquisition Corp III (DCRC) are very intriguing, but it is important to stay patient and let the SPAC arbitrage unwind.
We are hitting intraday lows as I write, and the mood is turning gloomy. That isn't a bad way for corrective action to resolve itself, but it can be painful in the short term.