Speculators Notably Quiet as Market Feels Negative Overtones

After some excitement on Monday, the market put investors to sleep on Tuesday. 

It was an extremely dull day with some negative overtones. Breadth was negative, and there were more new 12-month highs than lows, but the Magnificent Seven MAGS was a safe haven again, with a gain of 0.9%. Small caps struggled with the Russell 2000, losing 0.5%. 

One of the most notable aspects of the action on Tuesday was that there was almost no strong speculative action. Only about a dozen stocks moved up more than 10%, and only one of them had a price higher than $10. I can’t recall the last time that speculative stocks were so quiet.

The bullish spin on this action is that the market is just digesting gains after a big bounce and is building a foundation for another move higher. The bearish spin is that this is stalling action, and if the market doesn’t exhibit better strength fairly fast, investors will become nervous and start selling again.

The primary problem is that the tariff issue is still lurking, and no one knows what Trump is going to do. Some of the concerns were lifted when Trump indicated he would be flexible, but there was fear of some aggressive action.

In addition, weaker-than-expected consumer confidence did not help matters. There is still a high level of general anxiety about inflation and the economy, and every new economic report has the potential for a negative response.It is an extremely tough market currently, and there is little choice but to stay patient and see how things develop.

At the time of publication, DePorre had no positions in any securities mentioned.