Selling pressure is picking up Tuesday morning as worries grow about higher energy prices, increased interest rates, the debt ceiling, and the potential for higher taxes.
There is no shortage of macro concerns right now and when that is combined with negativity seasonality and a market that is still dealing with corrective action then we have a recipe for poor action.
Breadth is running more than 3 to 1 negative but what is most notable is that pockets of strong speculative action have disappeared Tuesday morning. There are only seven stocks up more than 10% and there are just a handful at day highs, and several of those are inverse ETFs.
The ARK Innovation ETF (ARKK) is breaking key support this morning and is at levels it last hit back in mid-June. That does not bode well for high-P/E growth names, although it is good that this correction action starts to sting a bit.
This is pitiful action but it is mostly a lack of buyers rather than a rush for the indexes. Several of my favorite small-caps are drifting lower this morning. I'm adding to Acacia Research (ACTG) , Katapult Holdings (KPLT) , Performant Financial (PFMT) , and dMY Technology Group, Inc. III (DMYI) . I also like the looks of ProQR Therapeutics N.V. (PRQR) , which is a biotech that is exhibiting good relative strength.
The market is poor so I am not rushing to take big positions. I'll be adding incrementally as things develop. There are many smaller stocks that look much better than the big-cap growth names.
