Monday's bounce action was weak, but there isn't even a minor effort to follow through to the upside this morning. It is miserable out there with a complete lack of interest and even less liquidity.
Breadth is around 3 to 1 negative, and the Nasdaq 100 ETF (QQQ) has already taken out Monday's lows. All the FATMAAN names are down, ARK Innovation ETF (ARKK) is down nearly 5%, and money has moved back into energy and some of the commodity names that were pounded yesterday.
It looks like market players are going to stand aside and see what Alphabet (GOOGL) , Microsoft (MSFT) , Visa (V) , and a few others report tonight. After the debacle of Netflix (NFLX) there is some obvious concern.
My feeling is that it may take a negative reaction to earnings to create the washout needed to lead to some technical support. Even if the earnings reports are solid, there is likely to be an inclination to sell into strength that will keep the upside capped. We just don't have conditions in place for sustained upside momentum. We probably need to go lower before we can go higher.
I see plenty of stocks that I want to buy, but I'm not going to do anything until we have some strength. My game is to buy trends rather than try to guess the lows. Right now, the trend is down, and there are no signs of support.
This is about as bad as it gets, but it is going to take some time before we can do much.
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