Investors felt a little better after the market finally bounced on Monday afternoon. There wasn't any clear panic, but the action became negative enough in the morning to help produce a decent counter-trend move.
The selling on Thursday and Friday was some of the most steady and consistent we have had in a long time, and it had a significant impact on sentiment. The usual pre-market, Monday-morning dip buyers were not even willing to try. However, around midday, the sellers ran out of steam, and buyers started to inch in. There was steady buying most of the afternoon, with growth stocks leading the way.
Weakness in oil and commodities hurt the S&P 500, but breadth finished around 4,300 gainers to 4,000 decliners and helped to lift some of the gloom.
This was not a wildly energetic bounce. It was more of a relief move after some very gloomy action. Still, it is a potential start to some sort of support.
It didn't hurt matters that Elon Musk nailed down a deal to take Twitter (TWTR) private. While this isn't a situation of someone snatching up a great value, it does illustrate that there are special companies that will be able to attract premium valuations even in the worst market environments.
We have a slew of earnings reports coming in over the next few days that are going to help determine the course of market activity going forward. Forward guidance and management comments will be especially important in driving the market reaction.
Market players are feeling a little better after the action Monday, but technical conditions remain very poor, and much work is needed before we can have a higher level of confidence.
Have a good evening. I'll see you Tuesday.
