Dazed and Confused on the Market

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After many stocks were pounded on Wednesday, traders were hopeful for some bounce, but it was a very anemic attempt on Thursday. The Russell 2000 (IWM) was the only index that managed to close in positive territory, and breadth was barely positive with around 4,200 gainers to 3,900 decliners. Early selling pressure helped to deliver over 800 new 12-month lows.

The problem is that the market just isn’t comfortable that Fed hawkishness has been fully discounted. A couple of Fed members spoke on Thursday, and that jerked the market around a little, but there is still great uncertainty as to whether big growth names like Apple (AAPL) and Microsoft (MSFT)  have corrected enough to reflect the higher level of risk.

Small caps exhibited a few signs of stabilization, but so many of them are deeply oversold with broken charts that it may take some time for better action to develop.

The monthly jobs report hits in the morning, and that may have some influence on the thinking about inflation, but this market is confused, and it is going to take some time to sort things out. I see many stocks of interest, but they need better price action to entice my capital.

Have a good evening. I’ll see you tomorrow.

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