It isn't too intense so far but there is steady selling this morning as market players start to ponder what is going to happen on the Fed interest rate decision on Wednesday. A cut has been so anticipated already that it is a painfully obvious 'sell the news' setup but some market players are likely to start positioning now for the reaction.
So far the S&P 500 is still holding above the gap created on Friday's open and breadth isn't terrible with about 2950 gainers to 3650 decliners. There are still over 225 stocks making new 12-month highs. Apple (AAPL) is holding up well in anticipation of its earnings, but Amazon (AMZN) is struggling.
I'm looking for some opportunities in small-cap names that report earnings soon that may pullback in this weaker market action. My Stock of the Week, Asure Software (ASUR) . Is an example, Barron's called big-cap cloud software a bubble this weekend and that is hurting some for the more popular names.
If stocks correct more in front of the Fed announcement it will change the dynamic for the news quite a bit. A correction now will prevent the 'sell the news' reaction. Weak action in front of the Fed has consistently been a market positive.
I view this as healthy selling at this point. It is what happens after the Fed that will be much more meaningful.