After intraday reversals every day last week, it is no big surprise that the gap-up open on Monday morning was immediately sold. There just is no appetite right now for buying strength, and market participants are using even minor strength as an opportunity to lighten up.
Breadth is running slightly positive, and there are 125 new 12-month highs, but many stocks are languishing and not finding much interest. While they are not being sold aggressively, they are slowly slipping as buyers fail to materialize.
There are two major technical questions right now. The first is whether the indices undercut the lows they hit Friday at the close, and the second is whether we have a weak finish Monday. Answers to those questions will determine whether this downtrend is gaining momentum or not.
My biggest concern right now is whether the stock-picking interest will evaporate and we see more correlated selling or will there continue to be some pockets of interest. Based on what I see right now, stock pickers are heading for the sidelines. Breadth is slipping, and the Friday lows are now in play.
I'm not doing any buying right now, but my Stock of the Week is Butterfly Network (BFLY) . I believe that this is a disruptive medical technology that is on the brink of substantial sales growth. A detailed discussion can be found here.
There are a number of stocks that I'm interested in buying as this pullback gains traction, but there is no rush at this point.