S&P 500 Winning Streak Ends as 'Sell the U.S.' Action Persists
The best thing going for the bulls now is a lack of significant news.
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The S&P 500 and Nasdaq 100 QQQ broke their six-day winning streaks on Tuesday with big-cap technology stocks finally taking a rest. It was one of the narrowest days for the S&P 500 since February, but breadth was solidly negative with 3,800 gainers to 5,900 decliners.
The top that hit the market in February was marked by several very narrow days. This decline in volatility may be viewed as an indication of complacency that can be very dangerous if any negative news hits.
Technically, it is hard to find fault with the market action other than the fact that it is a bit overbought and in need of a rest. A narrow-range day is exactly the sort of action that helps remove some of the bullish excess, but it also is an indication that there is little fear.
The best thing going for the bulls right now is that there aren’t any major news events on the docket. A couple of Fed members mentioned how there is likely to be some increased price pressures as the workarounds for tariffs start to erode, but, for now, market players are content with the pause in the tariff turmoil and not thinking too much about what happens when the pause period expires.
One troubling issue is continued indications of a "sell the U.S." action. The dollar was weak again, and bonds dropped after a strong recovery on Monday. Higher interest rates are a danger that makes the Fed’s job much more difficult.
There was some good individual stock pickings in biotechnology today, but there were few other places to hide. It was a quiet day, but not a particularly positive one.
Have a good evening. I’ll see you tomorrow.
At the time of publication, DePorre had no positions in any securities mentioned.
