Jerome Powell continues to cultivate an optimistic tone about the ability of the Fed to deal with inflation, but he is increasingly clear that there is a high risk of a recession.
Much of the market is already anticipating slowing growth, which is why Powell's comments about a possible recession are not generating a negative response.
Breadth is solid at around 2 to 1 positive, but we are still seeing a fair number of new 12-month lows on a daily basis. There are around 330 currently, and include a number of names in the cannabis sector.
There is some good action in high PE technology names like Snowflake (SNOW) , Upstart Holdings (UPST) , CrowdStrike (CRWD) , Shopify (SHOP) , and others, but these are stocks that still have badly broken charts and need further work before they are technically healthy.
I continue to view this as primarily a market for short-term trading, but I'm starting to look harder at some names that I feel will have strong earnings reports for the second quarter. Earnings season starts in about two weeks, and that may help to shift us more toward stock picking that is less index driven.
Right now, we are still dancing around to macro matters that are being presented by Chairman Powell. The last three times he has spoken about policy, the market acted very strongly but then sold off hard after he was finished. We will see how well things hold up today when he wraps up his testimony.