The pattern of alternating days of strength and weakness continues.
The bears took their turn and produced losses for all the indexes, with small-caps lagging. Breadth was around 2,400 gainers to 5,900 decliners, but new lows remained very narrow with just 110 names.
There were a few pockets of strength, including some biotechnology and high P/E-growth names such as those favored by Ark Innovation ETF (ARKK) . Oil (USO) blasted to another high, but natural gas took a hit due to an explosion at an LNG facility that will negatively impact exports.
The market has been stuck in a trading range for eight days so far. In view of the news flow that we are wrestling with, that is pretty impressive. It would be very easy for negative sentiment to ramp higher on inflation worries, record gas prices, or any number of other macroeconomic concerns.
The longer this action continues, the better the support for a potential leg higher, but if the bears take control again, then this consolidation will end up being very strong overhead resistance.
I am encouraged by some of the stock-picking I am seeing and find it particularly positive that biotechnology is finally starting to see some relative strength. This has been one of the most miserable sectors for over a year, but it looks like there is some good bottoming action in various names right now.
Have a good evening. I'll see you Thursday.
