This is the daily notebook of Mike Santoli, CNBC's senior markets commentator, with ideas about trends, stocks and market statistics. Market finds its footing after a 1.5% dip , with the areas that have been correcting for a while bouncing most (small-caps, high-beta, banks). Is the hangover from the surge into options expiration Friday over? Enough of a pullback in the broad list of stocks under the surface to draw fundamental bidders? Or just a bounce in a new range? The S & P 500 is still working below the upper edge of its post-election rally. In each of the prior three months, pullbacks have hit or come very close to the rising 50-day average, which tested and confirmed the uptrend. Still a few percent above now, though maybe the pattern noted here for weeks of late-month weakness is now too widely seen? If that was it for this dip it's perhaps an impressive show of resilience but would not seemed to have generated much spring-loaded energy for a major run to new highs. A show-me tape. This market has for some time had a knack for quarantining the sick-looking subsectors and rotating away from harm. This has given us rolling pullbacks in over-extended groups more than broad-scale pullbacks. ARKK, SPACs, solar, cloud and recent IPO stocks all peaked in mid-February. They are all (except IPO ETF) well above March lows and arguably have been building bases since. Slight bump in Treasury yields on the Bank of Canada taper news doesn't look like much. But neither does the yields' pullback in recent weeks – so far just a consolidation/test of the break higher, still not yet unwinding the rising pattern. Investor sentiment in general pretty happy and comfortable, which is a potential hazard only when market breadth flags badly and momentum is cracked. Neither has happened decisively. The Investors Intelligence weekly survey shows 63.7% bulls vs. 16.7% bears, about matching the widest spread in 3+ years. Market breadth today is quite strong, more than 80% of all volume in advancers as small-caps bounce the most. Yet still more new lows than highs on Nasdaq. Soft spots abound. Mentioned yesterday VIX was not alarmed by the market wobble, and today shows why, VIX shuttling below 18 again, giving a wink to the index bounce for a day at least. Credit indicators also show no stress.
This is the daily notebook of Mike Santoli, CNBC's senior markets commentator, with ideas about trends, stocks and market statistics.