On Friday, the indices held up very well despite the fact that the deal to end the government shut down was a classic 'sell the news' setup. There was probably a delayed reaction to that setup and when combined with poor earnings news from both Caterpillar (CAT) and Nvidia (NVDA) , it is created a sharp selloff this morning. What is particularly notable is that there were eight earnings reports before the open this morning and seven of them missed estimates.
The indices have bounced off the early lows, with semiconductors leading, but breadth is running about 2200 gainers to 4800 decliners and there is some hesitation among the dip buyers.
The earnings news this morning is making market players nervous about some of the big reports on the schedule this week. Apple (AAPL) reports on Tuesday night and there is obvious nervousness after the Nvidia report today.
I've been looking for a market pullback to develop and that is what we are seeing now. I'm going to stick with some short positions as I don't think we are going to immediately bounce back that easily this time.
There is some small cap action of interest such as Qutoutiao (QTT) , my Stock of the Week, Uxin, Ltd (UXIN) , Marin Software (MRIN) and various 'pot' stocks. However, it looks like the S&P 500 is about to test the intraday lows and that will prevent much upside action.